A delegation led by Dr. Mohammed Khalfan bin Kharbash, UAE Minister of State for Financial and Industrial Affairs and Chairman of DIB made the announcement yesterday at a ceremony hosted by Pakistan Prime Minister Shaukat Aziz in Islamabad.
The announcement marks a first step in the bank's ambitious plans to roll out its operations into regional and international markets as part of its overall strategic plan. The move will consolidate DIB's position as one of the leading Islamic finance organisations in the world and pave the way for its strategic deployment in Pakistan.
Aziz welcomed the delegation and stressed that the visit reflects the strong economic ties between Pakistan and UAE. He said that the step would also pave the way for enhancing the economic ties between both countries in the future. “DIB's primary experience in Islamic banking would be an added value to boost the financial and banking services in the Pakistani market,” Aziz said
State Bank of Pakistan (SBP) Governor Dr Ishrat Hussain welcomed the initiative at the announcement which is the first step in DIB's deployment of an Islamic bank in Pakistan to target corporate, retail, commercial and SME business segments and investment banking opportunities.
“DIB's new partnership is the result of the historic and age-old ties between Pakistan and the UAE. This means far more to us than just a commercial agreement,” Dr Khirbash said.
DIB Pakistan will introduce Shari'a compliant home mortgage financing, real estate development financing, and other innovative financing schemes using high level technology.
SBP has granted an in-principle approval to DIB Pakistan, which is expected to lead off operations with a range of Islamic banking activities and an extensive portfolio of Shari'a-compliant products through a large branch network spread across the country.
“What we are seeing today is recognition of the rapid growth of Islamic banking in financial markets all over the world. Growth rates for the sector have generally been around the 20 per cent mark, compared to the 5 per cent seen by conventional banking,” Dr Khirbash said.
DIB is looking for a rapid expansion of its investment to take maximum advantage of the opportunities in Pakistan. DIB played an active role in developing the market of Islamic commercial paper in Pakistan when the bank participated as a co-manager of the Sovereign Islamic Sukuk issue. The success of the issue consolidated the status of DIB as an Islamic Sukuk powerhouse as it follows the bank's single largest Sukuk issue in the world in 2004, which successfully closed the $1 billion Dubai Civil Aviation transaction to fund the expansion of Dubai International Airport.
DIB will leverage the expertise and experience of its Shari'a board to play a significant role in the development of sophisticated Islamic banking products and Shariah compliant services in Pakistan.
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