The Senate Standing Committee on Finance has instructed the State Bank of Pakistan (SBP) to deliver a comprehensive briefing on Islamic Banking. This directive came after Committee Chairman Senator Saleem Mandiwalla expressed concerns that Islamic banks are exploiting consumers by imposing high interest rates.
Senator Mandiwalla criticized Islamic banks for charging interest rates as high as 30 percent, compared to the 20 percent charged by conventional banks, and accused them of defrauding customers. He cited numerous cases where Islamic banks were reportedly charging excessive interest rates.
The committee also requested the SBP to provide insights into Islamic banking practices in other countries. During the meeting, the SBP Deputy Governor noted that Islamic banks currently hold a 25 percent market share, while conventional banks account for 75 percent.
Additionally, senators raised issues regarding the prolonged delivery times for credit cards, with some customers waiting 5 to 6 months without receiving their cards.
The committee was informed that approximately Rs. 97 billion is held in around 14 million dormant bank accounts. The SBP proposed extending the period for permanently closing dormant accounts from 10 to 15 years, a suggestion that the committee approved.
