Categories: Business

SECP Approves Strategic Action Plan 2024-2026 for Non-Banking Islamic Finance Growth

This initiative aligns with the 26th Constitutional

Amendment, mandating the elimination

of Riba by January 1, 2028

Business Reporter

Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has approved its Strategic Action Plan 2024-2026 to advance Islamic finance in non-bank financial sectors. This initiative aligns with the 26th Constitutional Amendment, mandating the elimination of Riba by January 1, 2028.

A Collaborative Roadmap for Islamic Finance

The plan was developed by the SECP’s apex committee, led by Commissioner-SCD Mr. Mujtaba Ahmed Lodhi. This committee, formed in 2023, included representatives from the Pakistan Stock Exchange (PSX), Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL), SECP policy departments, and industry experts.

The roadmap sets a clear timeline, enabling Islamic finance across all SECP-regulated sectors by December 2026. Following this, a structured conversion plan will guide the seamless transition of conventional financial institutions to Islamic financial institutions, minimizing disruptions.

Key Focus Areas

The Strategic Action Plan centers on four main pillars:

  1. Growth Acceleration: Expanding Islamic finance’s share in regulated sectors.
  2. Standardization: Ensuring consistency and harmony in practices.
  3. Quality Enhancement: Boosting performance and efficiency of Islamic financial institutions.
  4. Strengthening Legal Framework: Building a robust foundation for sustained growth.

These pillars aim to drive the expansion of Islamic financial institutions, assets, and services within the non-bank sector.

Industry Collaboration for Effective Implementation

The plan underwent thorough reviews and consultations with Capital Market Infrastructure Institutions (CMIIs) to ensure its feasibility. The SECP will leverage the expertise of CMIIs to create a supportive regulatory framework that promotes Islamic finance growth.

Commitment to a Riba-Free Financial System

The SECP reiterates its commitment to fostering a conducive environment for Islamic finance, aligning with constitutional and legal requirements. This strategic action plan underscores Pakistan’s dedication to transitioning toward a Riba-free financial system by 2028.

WebDesk

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