Bridging Gaps in the Local Shariah-Compliant Banking Products Market

In today’s digital world, banking customers demand easy and immediate payment methods as carrying cash increasingly becomes a hassle and out of vogue. For this purpose, commercial banks offer various solutions including digital banking that’s done through the web or mobile apps, as well as cards such as debit and credit cards.

Many customers find the credit card facility preferable in certain situations as it allows them to make purchases now and pay later. The credit card has multiple benefits such as cashback rewards, global acceptance, advance cash, internet banking, utility bill payments, online shopping payments, merchant payments, insurance, and many more. These features attract customers to use a credit card and make their lives easy.

While the earliest forms of credit card date back to the 1950s, in Pakistan, they’re a relatively new concept with the country’s first credit card having being launched in 2004. Although 17 years have passed since then, the penetration of credit cards is still low in the country with only 1.6 million people using credit cards, according to SBP stats. Even lower is the share of Shariah-compliant credit cards despite the constant growth of the Islamic Banking industry.

Islamic banks have played a pivotal role in banking the non-banked segments by offering Shariah-compliant alternatives to all conventional banking products including deposit, auto and mortgage financing, and insurance products. But the key reason behind the penetration gaps in Shariah-compliant credit cards, among other banking products, is the limited availability of such products.

In the past, Islamic credit cards have gone through various Shariah discussions and a number of experiences in terms of their availability and replication compared to a conventional credit card. But this product could not thrive owing to various restrictions under Shariah Laws. Although some banks introduced their Islamic credit cards that were compliant with Sharia principles operating on the ‘Ujrah’ concept, the product had some acceptance challenges and remained limited to a certain segment.

But, a fresh product in this domain, namely the ‘Noor Card’ by Faysal Bank, aims to change that. A Shariah-compliant alternative to conventional credit, the Noor Card is powered by Mastercard and offers Faysal Bank’s Islamic Banking consumers a range of benefits across various categories of transactions. The card has been launched under Faysal Bank’s strategic vision to be the first-choice partner in the Islamic Banking industry.

As Faysal Bank’s conversion to a full-fledged Islamic Bank is also underway, the launch of Noor Card is being hailed as a major milestone in the bank’s transformation journey. According to the bank, the development of Noor Card took almost 5 years of continuous efforts, deliberations, and approvals from all stakeholders involved including but not limited to Regulators, Shariah Board Faysal Bank & SBP, and external and internal Legal Councils of the bank.

“The launch of Faysal Islami Noor Card reaffirms our commitment to achieving leadership in providing Shariah-compliant financial and payment services to our customers,” shared Mr. Tahir Yaqoob Bhatti, Faysal Bank’s Head of Retail Banking, while commenting on the development.

“The launch of Faysal Islami Noor card reaffirms our commitment to achieving leadership in providing Shariah-compliant financial and payment services to our customers. The launch of ‘Noor’ sets sail to a trailblazing initiative to the Bank’s credit, transforming the experience of Islamic banking customers,” he added.

Mr Yaqoob Bhatti further said that Noor Card customers can use this Shariah-compliant card with complete satisfaction and peace of mind, enjoying a range of distinct reward systems and premium benefits within the strict umbrella of Shariah-compliant banking practices and principles.

Faysal Islami Noor Card is based on the Shariah principle of ‘Tawarruq’ which is an arrangement in which one party sells a commodity to the other party on deferred payment at cost plus profit. The other party, namely, the buyer, then sells the commodity to a third party on cash with the purpose of having access to liquidity.

Thus, the structure of the Noor Card facility reflects a trade transaction to obtain liquidity rather than just directly lending money like that in conventional credit cards. The Tawarruq principle has been adopted globally by international and local Islamic Banks in the Gulf, the Middle East, and Malaysian markets for unsecured products like credit cards and personal loans due to high demand for Shariah-compliant credit facility in the regions.

Faysal Islami Noor is accepted at all local and international merchant establishments and ATMs and is encapsulated with Chip & PIN, 3D secure, and Contactless technology which provide complete security on performing retail and online transactions.



  • Get Alerts

    Follow ProPakistani to get latest news and updates.


    ProPakistani Community

    Join the groups below to get latest news and updates.



    >