CPI Financials IslamicBankingFinanceIssue78Pg41 IslamicBankingCareerOpportunites Pakistan

8/18/2019 CPI Financials IslamicBankingFinanceIssue78Pg41 IslamicBankingCareerOpportunites Pakistan

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EDUCATION

www.cpifinancial.net ISSUE 78 | Islamic Business & Finance

W e live in an age ofspecialisation, wherehuman resourcescan capitalise on the

opportunities created by the demandand supply of skilled professionals.Islamic finance practitioners,academia and training industry in

Pakistan are very well positioned tomake the most out of it.

Higher education institutions,being one of the major producers ofhuman resources to Islamic financialinstitutions (IFIs), ought to train,create awareness and provide careerorientation to their graduates to exploitcareers in IFIs locally as well as globally.

As a qualified and experiencedIslamic banker, I have attempted toenvisage the state of the local and

international Islamic banking industry,including growth dynamics, humanresourcing requirements, functionalroles and the challenges ahead forthe Islamic banking industry. In thisarticle, I have tried to map out skillrequirements and the underlying careeropportunities for potential employeesand young graduates, and employers inPakistan as well as in the GCC.

INDUSTRY AT HOME

Pakistan’s Islamic banking industry

surfaced in 2001 and claims to be a PKR711.00 billion (approx $7.00 billion)industry comprising five indigenousbanks and 12 Islamic windows with abranch network of 964 branches, 500 windows and a nationwide presence.Pakistan’s nascent industry has a YoY growth rate of 30 per cent. Thisgrowth has been galvanised by optimal

profitability with Return On Equity of15 per cent.

GROWING DEMAND

Reportedly, bankers, economistsand investors are moving towardsan Islamic economic system becausethey have realised that this emergingsystem can be an alternative after acapitalist system has harmed so many.

Moreover, S&P highlights adazzling growth potential for Islamicbanking, thanks to a young, fast-

growing Muslim population, robustmacroeconomic environments, largeinfrastructure projects that requirefinancing, formation of Shari’ah-

compliant indices for companies listedin stock markets and recent politicaldevelopments in several Muslim-majority countries.

In 2008, the State Bank ofPakistan (SBP) in its five-year strategicplan, stressed the importance ofstrengthening human resources toeventually strengthen Islamic banking.

Muhammad ArsalanAqeeq takes Pakistan as a case study fordeveloping an education system that would provide the Islamicfinance industry with the skills it so desperately needs

Career opportunities

Muhammad ArsalanAqeeq

cont. overleaf


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EDUCATION

www.cpifinancial.netIslamic Business & Finance | ISSUE 78

cont. from pg41

As with all developing sectors, theIslamic Banking Industry (IBI) alsosuffers from a lack of candidatesspecifically trained in Islamic banking.

Conservative estimates based onthe methodology adapted by SBPstrategic plan 2008-2012 project thatthe industry will need 22,000 qualifiedpersonnel by 2017, as compared to the15,000 currently available. Based oninternational best practices the 22,000employees needed by 2017 translates toone per cent, or 200 senior managers,15 per cent or 3000 mid-level managersand 84 per cent or 16,800 front line orfield staff. This defines the capacityneeded for developing the differentlevels of human resources.

In order to meet the specificrequirements of the industry that focuson relevant areas at multiple levels,there is a need to have a specialisedinstitution in the country that caters tospecific industry requirements and isstructured to provide focus in specificareas. Higher education institutionsand business schools need to realise andtap the potential of the Islamic financeindustry and its appetite for qualifiedIslamic bankers. Higher education

institutions are expected to roll-outinternationally accredited academicand professional qualifications andprogrammes to facilitate the industryin developing the human resources which it needs to be sustainable.

HELP NEEDED

Candidates need to be well-versedin conventional banking practices as well as Islamic banking and must beable to understand and communicatethe difference between the two. Given

that there is a religious backgroundto Islamic banking there exists a needto understand the basic principlesof Islam in relation to financialtransactions. The requirementfor better-qualified personnel hasincreased particularly in ProductDevelopment, Risk Management,and Shari’ah compliance.

Staff level distribution as per international standards*

Additional Staff Required by 2017 22000

Senior Manager 1% 220

Mid-level managers 15% 3300

Front line Field staff 84% 18480

ProjectedGrowth %

Estimated Human ResourceRequirement Projections

HumanResource[Avg.

Head Count 15/branch] Year Assets Rs inBn Branches

20 2012 712 1,000 15,000

20 2013 855 1,772 18,000

20 2014 1,026 1,440 21,600

20 2015 1,231 1,728 25,920

20 2016 1,477 2,074 31,104

20 2017 1,772 2,488 37,325

Relationship/BranchManagers

Front office professional, General banking & relationship management skil ls along withthorough shariah product knowledge.

Islamic Corporate/Investment Bankers

Front office personnels, Corporate lending, credit risk & shariah facility structuring.

Shariah ProductDevelopment

Specialist function with sound knowledge of Islamic commercial law, productdevelopment and banking operations.

Shariah Compliance

Auditor/ Officer

Exclusive Islamic Banking requiring Shariah Product and processflow knowledge forshariah governance and control.

Risk ManagersRisk management knowledge for market, credit and operational risk in addition toshariah related facility risk and shariah compliance.

Trade FinanceManager

Trade finance , International Codes, UCP along with shariah modal ities and transactionprocess flows requirements.

Operations Manager General banking operation knowledge with knowledge of shariah accounting treatmentsand flows

Treasury ManagerTreasury, FX, Market Risk, Asset Liability Management with shariah compliantinvesments & liquidity management expertise.

Islamic Equity &Mutual Fund Manager

Portfolio management, asset risk profiling, fixed and equity markets along shariahscreening and compliant investments.

Takaful Manager Acturial underwriting, risk profiling, premium and portfolio management along withshariah contractual arrangement and shariah investments.

Shariah AdvisorThe centripetal body holding the riegns of shariah governance, control and compl.

Authority and Subject matter expert on Shariah, Fiqa, Islamic Commercial Law

SITUATIONS VACANT IN ISLAMIC FINANCE


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EDUCATION

www.cpifinancial.net ISSUE 78 | Islamic Business & Finance

Muhammad ArsalanAqeeq is an experienced Islamic banker from Pakistan. Heholds a Diploma in Islamic Finance from CIMA and has experience in corporate lending,syndication finance, project finance, credit risk review, cash flow analysis, financialmodelling and credit origination functions for conventional and Islamic bankinginstitutions. He is an independent corporate trainer and research supervisor in premieracademic organisations like the Institute of Bankers Pakistan, Karachi Institute ofEconomics and Technology and the Shaheed Zulfiqar Ali Bhutto Institute of Science andTechnology. He may be contacted at: [email protected]

Candidates needto be well-versed

in conventionalbanking practicesas well as Islamicbanking andmust be able tounderstand andcommunicatethe differencebetween the two

Islamic banks’ personnel must beproficient in conventional bankingoperations and product structuringand they should be able to explainto customers the differences betweenIslamic and conventional productstructures. Consequently, the demandfor Islamic banking and financeeducation and training has increasedand the number of institutionsproviding higher education andtraining for Islamic banking andfinance is also increasing.

THE REAL CHALLENGE

The human resources produced byconventional academic programmescannot meet the demands and skillsset of the Islamic financial institutions, which require highly-competent andmotivated candidates with requiredknowledge of conventional bankingas well as knowledge of Islamic

economic principles.Being a nascent industry with 11

years of history, existing conventionalfinance professionals need to betrained to shrink the shortage ofexperienced professionals.

The shortage of skilledprofessionals is graded as the one ofthe key impediments to the growthof the Islamic finance industry locallyin Pakistan, where Islamic financehas an eight per cent penetrationrate, as well as globally, whichcan only be addressed by highereducation institutes.

CAREER OPPORTUNITIES

In the terse words of the Governor of

Bank Negara Malaysia Dr. Zeti Akhtar Aziz, ‘‘Islamic banking and finance is a‘mirror of the sea’ for until and unless we have the courage to explore its depth, we would never be able to uncover thetreasures that reside within.’’

Apposite education is the keyenabler towards the explorationof the treasures of this sea. StateBank of Pakistan- NIBAF Program,International Islamic UniversityIslamabad, Daar-ul-Uloom Karachi,

MBA in Islamic Finance Muhammad Ali Jinnah University, ShaikhZayedInstitute University of Karachiare a few big names engaged inIslamic finance programmes. But,its adequacy to meet the estimateddemand of over 20,000 personnel inthe upcoming five years remains amoot point. Moreover, accreditationand recognition of these programmes

from bodies like AAOIFI, INCIEF,ISRA, IFSB etc. also call for morefocused efforts.

WORLD OF POSSIBILITIES

Being a specialty domain, there aregood prospects for skilled youths toexport their expertise to GCC andMENA countries, Malaysia, Omanand even to emerging westernmarkets like Australia.

India, one of the biggest exportersof human resources to the GCC, doesn’thave a local Islamic finance industryand thus leaves Pakistan the soleregional provider of human resource,making competition irrelevant.

Islamic finance qualifications and

academic programmes also attractIslamic studies and Fiqh students tomainstream employment opportunitiesby training them on modern Islamicbanking and finance skills.

A career in Islamic finance coversa variety of human resource profilesand backgrounds to serve functions likeShari’ah compliance auditor, productdevelopment, Shari’ah advisors, fundmanagers, operations manager, Islamictreasurers, business managers and

Takaful portfolio managers.Currently, there is a skill-to-employment gap prevailing in theIslamic banking and finance industryin Pakistan. Higher educationproviders must also come up withstandardised and internationallyaccredited programmes and initiativesto serve the emerging demands of theglobal Islamic f inance industry.

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CPI Financials IslamicBankingFinanceIssue78Pg41 IslamicBankingCareerOpportunites Pakistan