Pakistan’s Islamic banking industry is growing rapidly with a combination of a predominantly Muslim population, still modest financial inclusion, and the commitment of the government and regulators as the key driving forces, Moody’s has said in a newly released report, adding that it expected the country’s Islamic banking assets to increase by 25 percent in the next five years.
The State Bank of Pakistan (SBP) last year said the Islamic Banking Industry (IBI) had recorded the “highest ever growth” in Pakistan as its assets surpassed the Rs5 trillion mark to reach Rs5,577 billion, with the highest ever increase of Rs1,308 billion.
The Islamic banking industry in Pakistan comprises 22 Islamic banking institutions, consisting of five fully-fledged Islamic banks and 17 conventional banks that have Islamic banking branches.
A total of 3,956 branches were in operation as of December 2021, with an additional 1,442 Islamic banking windows (dedicated counters at conventional branches).
“Islamic banking assets in Pakistan have grown by an average of 24 percent per annum over the past decade to PKR5,577 billion (U$31.2 billion), accounting for around 19 percent of total banking assets, up from 8 percent in 2011,” Moody’s said. “We expect annual growth of over 25 percent over the next five years, pushing up the sector’s market share to around 30 percent.”
The investor service said a large Muslim population and still modest financial inclusion were key growth drivers.
List of 22 Islamic banks in Pakistan
Islamic banking or Islamic finance or Sharia-compliant finance are Sharia-compliant banking or financial activities and their practical application through the development of the Islamic economy. Some of the Islamic banking / finance modalities include Mudarabah (profit sharing and loss), Wadiah (custody), Musharaka (joint venture), Murabahah (additional cost) and Ijara (lease).
- Al Baraka Bank (Pakistan) Limited
- Allied Bank Limited
- Askari Bank
- Bank Alfalah Limited
- Bank Al-Habib Limited
- BankIslami Pakistan Limited
- Citi Bank
- Deutsche Bank A.G
- The Bank of Tokyo-Mitsubishi UFJ
- Dubai Islamic Bank Pakistan Limited
- Faysal Bank Limited
- First Women Bank Limited
- Habib Bank Limited
- Standard Chartered Bank (Pakistan) Limited
- Habib Metropolitan Bank Limited
- Industrial and Commercial Bank of China
- Industrial Development Bank of Pakistan
- JS Bank Limited
- MCB Bank Limited
- MCB Islamic Bank Limited
- Meezan Bank Limited
- National Bank of Pakistan