Central Bank of Pakistan Getting Serious about Islamic Banking


Islamic banking has been a part of Pakistan’s banking system and in 1970s Pakistan was in the list of some of the first countries that let the Islamic banking prevail nationally. The data provided by the central bank of Pakistan in the September of last year showed that Islamic banks in Pakistan were containing 9.5% of the total bank assets in the country, which means they were holding in them a huge amount of $8.8 billion. However, is that figure really impressive? The answer is no because in the Gulf Arab realms the percentage held by Islamic banks of the total assets is touching 25%.

Realizing that Islamic banking need some more attention, The Central Bank of Pakistan is now giving the required attention to the subject now. Central bank seems to be targeting a double percentage than now and reach a total of 15% in the coming half decade. The bank has already started to take steps to meet the target and improve the prevalence of Islamic banking in the country.

The first step taken by the Central Bank is in the step of appointing a new deputy governor who will use his knowledge and experience to improve the Islamic banking in the country. The inclusion of Muhammad Taqi Usmani in the Sharia Board of the bank is going to enhance the efforts of making masses aware of the Islamic banking system in the country.

Shakir Ullah, who is an important part of the group taking care of the matters of Islamic banking in Pakistan, has shown his concerns of the matter by stating that Pakistan needs more Sharia based Islamic banking in the country rather than sticking to the Sharia compliant banking. He also said that Pakistan could regain its position it had in 1980s and play a major role in promoting and prevailing the Islamic banking around the globe.

Why people are more inclined towards Sharia based Islamic banking is due to the reason that this type of banking directly follows the basic Islamic principles, which is not the case with Sharia compliant banking that still works mostly under the guidelines of conventional banking.