Interview with Mr Hamad Rasool Bhullar — an analyst
PAGE: Tell me something about yourself, please:
Hamad Rasool Bhullar:Â I have been working for both the private and public sectors over the last about 32 years in multiple roles with almost 27 years in professional trainings. With respect to my work with the financial sector, I have been involved in research and training for almost 27 years so far, and conducted over 350 trainings on different aspects of finance, business ethics, audit and corporate governance from basic concepts to professional applications in projects finance, Shariah Compliant risk management, investment management and financial analysis etc. in addition to the freelance consultancy and financial advisory in these fields. I remained a non-executive member on the Board of an Investment Bank for almost four years.
My qualifications and experience over the last 32 years, have mainly been in accountancy, corporate law, IT, economics, corporate finance and Islamic finance, Takaful, business turnarounds, projects finance, audit & ethics with trainings and business advisory in multiple areas of corporate sector as well as public sector within and outside Pakistan. I have a privilege to have issued the first Sukuk in Pakistan’s Investment Canvas with some other first such initiatives.
PAGE: Since the inception of the Islamic finance industry in the 1970s, there has been steady growth in the demand for Shariah-compliant products and services. What is your perspective about it?
Hamad Rasool Bhullar:Â It is a broad-based question practically, yes globally the Shariah-Compliant products and services in the financial sectors started even in late 1960s. However, after the establishment of Islamic Development Bank (IsDB) in 1975, the things started spreading quickly, as IsDB played a great deal of service in developing uniformity in practices as the IsDB provided a common platform for research and development in multiple areas of Islamic Finance related projects across 57 countries.
In the meantime, some more institutions were established and developed towards the overall development of the cause.
Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) was established during 1990-91 in Bahrain, as a leading international non-profit organization responsible for development and issuance of standards to guide globally in operations and reporting by Islamic finance industry.
In Pakistan, we were quite late in this initiative, as Islamic Finance department was set-up by State Bank of Pakistan in 2002 after the historic decision by the Federal Shariat Court on December 24, 1999 issuing special directives to the State Bank. On the growth aspect, there is a great potential, which still stands unexploited due to the fact that, Islamic Finance industry is facing a reputation and transparency risk which has to addressed seriously by the stakeholders and the regulators.
PAGE: The Islamic finance industry faces unprecedented challenge to its development in the wake of Covid-19 pandemic, the volatility in oil prices and the uncertain macroeconomic environment. What is your standpoint?
Hamad Rasool Bhullar:Â The pandemic, has affected the entire world and every sector of the economy globally without exception. On the other hand the world is facing serious imbalance in many sectors like global shipping industry got a major hit in shortage of staffing, then the oil prices volatility added to the misery even in many countries it caused political unrest, unemployment, shortage of food supplies, great deal of labor shifts and mobility in the form of oversees workforce causing major problems in psychological stress and fatigue in the communities causing to trigger criminal elements of invade in the macroeconomic environment.
Islamic Finance industry being part of the economy also faced certain challenges and hurdles, however these dents on the growth are temporary, and the effective collective efforts can manage to bring the growth trends on track. As the business comes to normal, Islamic finance will start to rise again as all the Islamic finance products are associated with real business transactions, Insha’Allah.
PAGE: Islamic banks were able to demonstrate resiliency in surviving the 2008 global financial crisis with minimal impact. They may withstand the forthcoming challenges as well. Your views:
Hamad Rasool Bhullar:Â Resilience to the key to survival which was also proved in 2007-8 and even subsequently certain hits to the economy were not so seriously affected because structurally all the products in Islamic Finance are based on transaction mechanism. Accordingly, these new challenges will technically require some deviations in structuring the transaction models, bringing more depth to the Islamic Financing tools but hopefully will sustain and rebound robustly. I believe that Islamic Finance has this capability and desired strength for advancing further deep into the business complexities with workable solutions.
PAGE: There is ample room for growth of Islamic banking. How would you elaborate it?
Hamad Rasool Bhullar:Â Effectively, Islamic Finance is still lagging behind, despite the fact that over the last two decades, growth has been quite impressive. As a system grows, it requires new energy in the form of new ideas and Islamic finance requires, new structures and working models to keep the pace of growth. There are many sectors of the economy, which are still un-tapped especially the agriculture sector where Microfinance remained quite popular, but SME sector has not yet taken the driving seat, same goes for medium sized businesses in the agro-based industries and businesses which usually remain to be approached effectively.
PAGE: Your views on Sukuk:
Hamad Rasool Bhullar: Sukuk is a great tool for growth of an economy, and myself being in the pioneers of Sukuk in Pakistan have worked a great deal in its practical aspects and research areas. A lots of public sector and private sector projects can be built and established through Sukuks Financing. It is quite a new Model in Islamic Finance industry but a modern and flexibly to be structured in every model for sustainable growth, but as I said earlier, we need to improve on the reputation and transparency issues in the economy with consistent and practical plans in every project. It can also bring quite a variety of businesses like stock markets and financial markets leading to broad-based economic growth.