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.
