Islamic Banking Now Makes Up 15% of Pakistan’s Banking Industry

With impressive growth and penetration across the country, Islamic banking industry has increased its share of assets and deposits to over 15 percent in the overall banking industry of Pakistan. This is a significant milestone for the industry showing its notable expansion and increasing acceptability among the customers.

The assets of Islamic banking industry reached Rs. 2.790 trillion by the end of March 2019. Deposits in the Islamic banking sector stood at Rs. 2.199 trillion by the end of the first quarter of 2019, according to State Bank of Pakistan.

In terms of market share of the overall banking industry, Islamic banking industry constituted 15 percent share in assets and 15.6 percent share in deposits of the overall banking industry by end March 2019.

It is important to note here that the network of Islamic banking industry consists of 5 full-fledged Islamic banks and 22 Islamic banking windows of conventional banks. Islamic banking branch network is operating with 2,869 branches spreading across 113 districts of the country.

Islamic Banking Assets

The full-fledged Islamic banks stand far ahead of Islamic banking windows of conventional banks. The assets of full-fledged Islamic banks stand at Rs. 1.640 trillion while the assets of Islamic banking divisions of conventional banks stand at Rs. 1.150 trillion during the said period.

In terms of share, full-fledged Islamic banks accounted for 58.8 percent and Islamic banking windows for 41.2 percent share in overall assets of Islamic banking industry during the period under review.

The share of net financing and investments in total assets (net) of the Islamic banking sector stand at 54.6 percent and 22.1 percent, respectively.

Islamic Banking Deposits

The penetration and acceptance of full-fledged Islamic banks is impressive in the banking industry compared with Islamic banking windows.

Islamic banks’ deposit reached Rs. 1.335 trillion while deposits of Islamic banking windows stood at Rs. 864 billion as of March 31, 2019. The share of Islamic banks and Islamic banking windows in overall deposits of Islamic banking industry stood at 60.7 percent and 39.3 percent, respectively.

Customers of the Islamic banking industry invest Rs. 866 billion money in saving accounts whereas they maintained current accounts having an overall value of Rs. 722 billion. Term Deposits are also a popular feature of Islamic banks that stand at Rs. 445 billion. Institutions also maintained profit-based accounts in Islamic banks with an overall value of Rs. 132 billion.