Islamic Banking Growth in Pakistan

Over the years, Islamic Banking Industry (IBI) has shown phenomenal growth, with 20% share in total assets, 25% in advances and 22% in deposits of the overall banking industry as of Dec-22. Today, IBI network comprises 22 Islamic banking institutions, i.e. 5 full-fledged Islamic banks and 17 conventional banks (~80% of total), having Islamic banking branches.

There is considerable potential as acknowledged by many researches including one undertaken by SBP and Department for International Development, UK. This suggests robust demand from diversified customer clusters, with following example insights:

Willing to pay more for Shariah compliant products

67% 62% 45%
sole-proprietors prefer only Islamic Of banked respondents Of un-banked respondents


As per decision of Federal Shariah Court, all conventional banks are to be converted to Islamic mode by Dec-27. Following are key areas, where banks may face challenges that can be addressed through holistic Islamic transformation and conversion programs:

  • People & Culture
  • Technology
  • Borrowings & Treasury
  • Marketing & Communication Plan
  • Retained Earnings
  • Accounting Policies & Procedures
  • Corporate & Investment Business
  • Retail Business
  • Non-Performing Loans
  • Policies & Processes