Question

Read from page 03 to 07 of State Bank of Pakistan’s Islamic Banking Bulletin of March 2020 (http://www.sbp.org.pk/ibd/Bulletin/Bulletin.asp). Write in your own words the Snapshot of current status of Islamic banking in Pakistan.?

Answer 1

Islamic banking is achieving marvelous growth throughout the world with massive pace. As a Muslim country, Pakistan is also trying to establish this banking system. For this, several steps have been taken in past due to which, at present, Islamic banking system is getting its strength. Similarly, the future of Islamic banking is also very bright in Pakistan.Conventional banking in Pakistan has very deep roots since its independence in 1947. An experiment was done in 1950s to convert conventional banking system to Islamic but it failed due to several reasons. In the light of the decision given by Supreme Court and Federal Sharia’h Court in 1992 to convert the conventional banking system into Islamic, the first Islamic bank, Meezan Bank was established in 2002.

Till today, there are 5 full-fledged Islamic banks working in the country having 767 branches. 15 conventional banks are also providing Islamic banking services through their 451 branches throughout the country along with 96 sub-branches by Islamic and conventional banks. Therefore, total network of Islamic banking branches is 1314, having total assets of 1016 Billion Pak Rupees and total deposits of 872 Billion Pak Rupees. Within a period of 12 years, Islamic banking has achieved a growth rate of 15 to 20 percent and captured 10% share of total banking network of the country (SBP). These milestones reflect that at present, Islamic banking is flying high by achieving extraordinary growth in the country. Government is also determined to convert whole conventional banking system into Islamic. Therefore, the future of Islamic banking in Pakistan is very bright and it will achieve its heights in coming years.

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