Islamabad, Aug 28: The committee chairman’s statement that Islamic banks are exploiting customers by charging exorbitant interest rates, the Senate Standing Committee on Finance on Wednesday ordered the State Bank of Pakistan (SBP) to present a thorough briefing on Islamic banking.
The committee also instructed the central bank to give a briefing on Islamic banking practices in other nations, under the direction of Chairman Senator Saleem Mandiwalla. Senator Mandiwalla criticized Islamic banks, claiming that while mainstream banks charge about 20 percent interest, Islamic banks charge up to 30 percent. He even went so far as to accuse Islamic banks of cheating their clients. According to the chairman of the committee, he has received numerous reports about Islamic banks charging outrageous interest rates.
The committee was informed by the SBP Deputy Governor that the market share of mainstream banks is currently 75%, while that of Islamic banks is currently 25%. The senators expressed dissatisfaction about the lengthy delivery timeframes for credit card deliveries, citing instances when credit cards remain undeliverable even after five to six months of delay.
Additionally, the committee was informed that around 14 million inactive bank accounts contain money totaling Rs. 97 billion. The committee accepted a proposal from the SBP to extend the time frame for permanently shutting dormant accounts from 10 to 15 years.
