LAHORE: Islamic banking is fast gaining ground in Pakistan because it is risk free as compared to conventional modes of banking.

This was stated by chief executive officer AlBaraka Islamic Bank Mohamed Isa Al Mutaweh while talking to Lahore Chamber of Commerce and Industry president Mian Muzaffar Ali here on Thursday.

He said that Islamic financing products such as Murabaha, Ijara, Musharaka and Islamic Export Refinance were catering to a diverse cross-section of the economy, including the corporate, SMEs and consumer sectors.

Speaking on the occasion the LCCI president said that more than two hundred and fifty Islamic financial institutions were operating worldwide from China to US. Western banks through their Islamic units in UK Germany, Switzerland, and Luxembourg were also practicing Islamic banking.

He said that Islamic finance was practiced mostly in the Muslim world throughout the middle ages facilitating trade and business activities. In Spain and Baltic States, Islamic merchants became indispensable middlemen for trading activities. Many concepts, techniques and instruments of Islamic finance were later adopted by European financers and businessmen.

He said that the Islamic financial system employed the concept of participation in the enterprise, utilising the funds at risk on a profit-and-loss-sharing basis.

Source: The Dawn