Al-Ameen Funds Chief Executive Officer (CEO) Shahid Gul Muhammad Motiwala has said that there is dire need to rectify the disconnect for the promotion of Shariah-compliant financial assets.
In an interview with Pakistan Today, he said the Muslims represent nearly a quarter of the world’s population and yet less than 1 percent of financial assets are Shariah-compliant. “There seems to be a disconnect here that is likely to be rectified in the coming years,” Motiwala maintained.
“Indeed, the funds industry is growing at 15-20 percent a year already, and this may rise as young Muslim populations and communities start to save for later life and as their investment preferences expand,” he observed.
He claimed that large sukuk issues in recent years had awakened investor interest and created the conditions for much increased institutional investment. “There is now both subtle and overt pressure for institutions to support the sukuk market and this has led pension funds and sovereign wealth funds to look at Islamic investment more closely,” he said, adding that “The dramatic increase in the takaful market and the dearth of products to service it should also present opportunities for asset management firms.”
“Although most conventional asset classes exist, some require further development to ensure they are fully Shariah-compliant and viable as investment propositions,” Motiwala said, adding that “While equities are well established, fixed income funds suffer from a lack of liquidity and inadequate valuation.”
“In the Islamic side the products for cash management are few and these offer very low rates,” Motiwala observed, adding that “This is due to lack of investment opportunities for liquidity management.”
However, he claimed that the Islamic banks deposits in Pakistan in general is growing at double the rate of conventional banks, but, short term investment avenues are few and returns are low. “This is evident from the last Isaiah sukuk issued by the government,” Motiwala maintained.
Describing Al-Ameen Funds, he said the Islamic Division of UBL Fund Managers, one of the largest asset management companies in Pakistan’s private sector and itself a wholly-owned subsidiary of UBL, one of the largest commercial banks in Pakistan with a history of over 50 years.
“Al-Ameen Funds represents the Islamic Investment Division of the UBL Fund Managers that manages Islamic Funds and plans and is dedicated to offering innovative asset management and investment advisory services in accordance with the principles of the Shariah,” Motiwala continued.
He said Al-Ameen Funds division works independent of our conventional funds, having specialized fund managers looking after your investments to ensure they remain completely Shariah-complaint.
“With Al-Ameen Funds, you benefit from an investment experience that is highly personalized, global, and competitive-the result of our profound experience in the asset management sector and our strong commitment to values and ethics,” Motiwala said, adding that “All investment made in our Islamic funds are approved and monitored by the Shariah Advisory Board (SAB) that comprises of renowned Islamic scholars; Mufti Muhammad and Hassaan Kaleem.”
He said that Its’ been a decade now when the State Bank of Pakistan (SBP) has granted first license to an Islamic bank in the country, and, over the last 11 years, the Islamic banking grows at a rapid pace and now come parallel to the conventional banking in Pakistan. “If we look into the pace of growth of Islamic and conventional banking, then we can understand that the Islamic banking is growing at much faster pace as compare to conventional banking,” he emphasized.
He maintained that numbers of Islamic bank branches are growing with each passing years and the conventional banks keeping the popularity of Islamic banking in view has opened Islamic banking windows.
He said that Islamic banking industry needs trained manpower and the business institutes should start separate programmes for Islamic banking in their educational institutes. “The leading business schools have included some subjects in the curricula as far as Islamic banking is concerned but there is a need of specialization to overcome the need of manpower in the growing banking industry,” he added.
I have been advisor of Albaraka Islamic Bank and faisal bank as well for many years. I regret the banks staff is NOT well versed with the islamic econmics, islamic law of contract, In case of default the bank follows the same route which commercial banks follow. is there any concept for mortgage of properties in Islamic banking, but they do that.
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