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Pakistani Islamic banks charge 25–30% interest. Mandviwala

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3 months ago

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The public is allegedly being duped under the guise of “Islamic banking,” according to the Senate Standing Committee on Finance, which is presided over by Senator Salim Mandviwala. Their concerns regarding the activities of Islamic banks are quite serious.

Salim Mandviwala, the committee chairman, said that Islamic banks, despite their claims to be interest-free, are actually charging far higher rates.

When it comes to borrowing, he disclosed that these banks charge interest rates between 25 and 30 percent, which is significantly more than the 20 percent that regular banks usually charge.

Mandviwala claimed, “The people are being deceived under the guise of Islamic banking,” emphasizing that it doesn’t seem like the State Bank of Pakistan (SBP) has much supervision over these businesses. “Islamic banks are operating without adequate oversight, and those who can take advantage are doing so freely,” he continued.

The public has frequently complained to Mandviwala about the excessive interest rates that Islamic banks impose. A comprehensive briefing on Islamic banking from the State Bank has been requested by the Standing Committee in response to these worries.

As a safeguard against potential exploitation, the committee’s findings have led to calls for increased regulation and transparency in the Islamic banking industry.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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