google-site-verification: google65a83de5d23a6899.html google-site-verification: google65a83de5d23a6899.html
HomeBusinessIslamic Banking Footprint to be Enhanced by 2023: SBP

Islamic Banking Footprint to be Enhanced by 2023: SBP

To promote the Islamic banking system in Pakistan, the State Bank of Pakistan (SBP) has directed commercial banks to enhance their Islamic banking footprint.

According to the circular sent to all banks and MFBs who have Islamic banking operations, it has been decided to allow them to revise their Annual Branch Expansion Plan (ABEP) for 2023 in order to include additional Islamic banking branches, offices, and conversion proposals as part of their planned branch expansions.

It was notified in light of the government’s directive, which announced in the next five years that the country’s economy and banking system will be rid of the riba-based economy and system within the country. Due to this trend, another alternative banking system has been cultivated in the country, namely Islamic banking, which has been growing by leaps and bounds in recent years, considering that the majority of the country’s population prefers this model over the one based on interest rates.

READ MORE: Amazfit Falcon rugged smartwatch with GPS navigation and a 14-day battery will soon be available in India

A number of commercial banks and microfinance institutions (MFIs) may also consider replacing conventional banking branches and offices, in line with the recommendations contained in the ABEP 2023, with Islamic banking branches and offices.

Additionally, banks and MFBs that have decided not to expand during the year 2023 are also encouraged to submit their ABEP-2023 by including their proposal for opening of new Islamic Banking branches and offices as well as their conversion proposal for the year 2023.

Islamic Banking Footprint to be Enhanced by 2023: SBP

It is therefore recommended that the MFBs and banks concerned revise their ABEP-2023 by including the maximum number of proposed branches, offices, and conversions of Islamic banking, and resubmit them before December 16.

During a recent conference organized by the National Institute of Banking and Finance (NIBAF) in collaboration with the Institute of Cost and Management Accountants of Pakistan (ICMA Pakistan), Jameel Ahmed, Governor of SBP, stated that, as a result of the Federal Shariat Court’s decision and the development of digital technologies, the transformation of the banking system from conventional to Sharia compliant mode will provide a great deal of opportunity for the banking industry as a whole.

It is with great pride that he reaffirmed the assiduous support which SBP has provided in the advancement of the digital transformation in the financial industry, as well as the unwavering support he has provided for Islamic banking transformation.


According to Ishaq Dar, the Finance and Revenue Minister of the Federal Republic of Pakistan, the banking and economic system can be transitioned in the next five years from an interest-based one to a Sharia-based one, provided all stakeholders work together in true spirit and letter.

READ MORE: A Galaxy Z Flip rival from Oppo

A special interest-free banking wing will be established within SBP in order to promote interest-free banking, he said. The purpose of this wing is to make recommendations, suggest reforms, and formulate a framework in order to get the country on its way to a fast and smooth transition from conventional interest-based economies to Islamic economies free from riba.

Pakistan has a total of 32 banks, of which five are fully-fledged Islamic banks, and 17 conventional banks that operate Islamic banking branches or divisions within their banks. 3 out of 11 microfinance banks have started offering Islamic banking services to their customers. There are more than 4,000 branches operating in the country, while the share of the Islamic banking system stands at 20% in overall assets and deposits of the banking system.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

google-site-verification: google65a83de5d23a6899.html