The deposit base of Islamic banking industry has crossed the Rs. 2 trillion mark in 2018 mainly due to its increasing penetration in different cities and improved adoptability.
Since the modern Islamic banking industry started off its operations in 2001, it gradually attracted public using Islamic banks for transactions and saving accounts. The industry attained the Rs. 1 trillion benchmark in 2014 whereas it picked up the pace in later years to cross the Rs. 2 trillion mark in 2018—merely in four years.
The share of the Islamic bank deposits stood at 15.5 percent in the overall banking industry. In 2014, the share of Islamic banks’ deposits stood at 11. 6 percent in the overall banking industry. The growth in share of the Islamic banking industry reflects its significant performance in Pakistan along with its popularity among the customers.
During the period, not only did the deposits base increase but its assets value and penetration through network have increased as well with the help of the banking regulator.
It is pertinent to mention that the public at large in Pakistan stays away from the banking system due to their religious faith. SBP adopted a plan to promote Islamic banking in Pakistan in collaboration with Islamic scholars and succeeded in expanding Islamic banking system in the country, which also paved the way towards a higher financial inclusion, banked society, and the documentation of the economy, etc.
Assets and Network of Islamic Banks
The asset base of Islamic banks crossed the Rs. 2 trillion mark in 2017. It stood at Rs. 2.658 trillion by the end of 2018, which is 13.5 percent of the overall banking industry.
The network of Islamic banking industry consists of 22 Islamic banking institutions including 5 full-fledged Islamic banks (IBs) and 17 conventional banks having standalone Islamic banking branches (IBBs) by December 2018.
In recent months, Zarai Taraqiati Bank Limited has also started its Islamic banking operations. During 2018, 270 branches were added to Islamic banking industry branch network.
Islamic banking industry recorded 2,851 branches spreading across 113 districts by December 2018. The number of Islamic banking windows operated by conventional banks having standalone Islamic banking branches stood at 1,288.