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IAS for Islamic banking to be enforced from next month

KARACHI: President of Institute of Chartered Accountants of Pakistan (ICAP) Syed Mohammad Shabbar Zaidi disclosed on Wednesday that ICAP has succeeded in developing International Accounting Standard (IAS) with regard of Islamic Banking and financial reporting system.

Addressing members of Karachi Income Tax Bar Association (KITBA) he said this IAS would be a land mark in the history of Islamic banking & finance as international reporting standards and requirements had been embodied in it so that it could be acceptable to professionals and regulatory bodies of Pakistan and abroad.

He said in the process of the preparation of this IAS all stakeholders were consulted extensively, but it is still open to accommodate any suggestions and improvements after the issuance of this IAS.

He said this IAS was being released on the first day of 2006.

He said it would be most transparent IAS with regard of Islamic banking and finance and Pakistan would be the first ever Muslim country of the world, which has succeeded in drafting this IAS.

He was optimistic that this IAS would beside standarisation, making available sound foundations for the speedy spread and growth of Islamic banking and finance thus helping directly in establishing more Sharia-compliant banks, financial institutions in the country thus creating new job opportunities to young trained manpower.

He said during the days of ex-president Zia-ul-Haq cosmetic and tailored made Profit and Loss Sharing system was introduced and at that time the professionals raised objections to that type of cosmetic PLS system.

He said accountants and tax practitioners had to work together so that twin objectives could be achieved.

He expressed the optimism that with coming back to home of overseas Pakistanis professional, the pace of national development starts momentum.

He was of the view that the Indian sound standing in IT business and Chinese rapid development was due to huge contributions made by overseas Indians and Chinese.

He said now the world of taxation and accountancy making almost revolutionary changes.

Ayaz Ahmed, Chief Financial Officer, Habib Bank Ltd, while making his marathon presentation with regard of Islamic banking said the Japanese model of growth and development was due to continued less than 5 per cent interest rate.

He said the high interest rates inhibit the growth and new job opportunities.

He said, “We have to adopt best international standards and practices so that we could achieve best possible results.”

Saqib Masood, President, KITBA, welcomed the guests.

Both speakers were presented shields of the bar.

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