Standard targets Pakistan Islamic banking

The British bank opened the doors to its first Islamic banking branch in Karachi on Friday.

Abid Sattar, Standard Chartered's head of consumer banking in Pakistan, said, "We were the first international bank to receive an Islamic banking branch license from the State Bank of Pakistan."

The retail branch will initially offer Islamic versions of current accounts, car loans and mortgages, and launch corporate banking services by the end of the year.

Islamic banking aims to meet the standards of Sharia law by forbidding interest payments (such as those on a standard mortgage) and pursuing ethical investments - avoiding companies that invest in alcohol, gambling, pornography, pork products, financial services or tobacco.

Increasing trend

Mr Sattar said all of Standard Chartered's Islamic banking services are supervised and reviewed by a Sharia supervisory committee consisting of Islamic scholars based in Jeddah and Bahrain.

Richard Thomas, head of the London-based Islamic Asset Management, believes Standard Chartered's move into Islamic banking is an example of a growing worldwide trend.

He cited the recent example of Saxony-Anhalt, a federal state in Germany, issuing Europe's first Islamic bond and the launch of HSBC bank's Amanah Islamic financial services brand in the UK and US.

Mr Thomas also points to the imminent launch of the Islamic House of Britain, the first Islamic bank to be approved by the Financial Services Authority.

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