Pakistan’s Islamic banking industry is expected to sustain strong growth momentum, with total assets projected to reach Rs. 18–19 trillion by December 2026, up from Rs. 14.47 trillion in December 2025, according to industry estimates shared during a media briefing hosted by Meezan Bank in Karachi.
The briefing was addressed by Ahmed Ali Siddiqui, Group Head Consumer Finance; Farhan Ul Haq Usmani, Head of Shariah Audit; and Muhammad Raza, Group Head General Services & Customer Support Group. The session aimed to enhance public understanding of Islamic banking performance, regulatory direction, and future growth prospects in Pakistan.
Industry projections indicate that Islamic banking deposits are expected to rise to Rs. 13.5–14.5 trillion by December 2026, compared with Rs. 11.04 trillion a year earlier. The sector’s share in total banking assets is projected to increase to 25–27 percent by end-2026 from 22.9 percent, while its share in total banking deposits is expected to grow to 30–32 percent, up from 27.8 percent.
Islamic financing is also forecast to expand significantly, with the financing portfolio projected to reach Rs. 7.0–7.8 trillion by December 2026, compared with Rs. 5.65 trillion in December 2025, reflecting increasing demand for Shariah-compliant financing across consumer, SME, agriculture, corporate, and government-linked sectors.
Speakers noted that Islamic banking continues to grow rapidly, supported by rising customer preference, regulatory support, branch expansion, broader institutional adoption, increased Sukuk activity, and Pakistan’s ongoing transition toward a Riba-free banking framework.
Over the past five years, the sector has recorded sustained expansion. Islamic banking assets increased from Rs. 5.27 trillion in December 2021 to Rs. 14.47 trillion by December 2025, while deposits rose from Rs. 3.62 trillion to Rs. 11.04 trillion during the same period. The Islamic financing portfolio also expanded from Rs. 2.35 trillion to Rs. 5.65 trillion.
According to the briefing, Islamic banking assets grew 23.1 percent in calendar year 2024 and 30.7 percent in 2025, highlighting strong demand and rising confidence in Shariah-compliant financial services.
Branch network expansion remains a major growth driver. Islamic banking branches are projected to reach 7,300–7,800 nationwide by December 2026, compared with more than 6,700 branches in 2025, further supporting financial inclusion. Digital banking channels are also expected to play an increasingly significant role in expanding access to Islamic financial services.
Industry participants believe Pakistan’s transition target toward Islamic banking by 2027–2028 will accelerate sector-wide transformation, encouraging both full-fledged Islamic banks and conventional banks operating Islamic windows to expand product offerings and customer outreach.
The briefing further highlighted that growing sovereign Islamic financing needs and continued Sukuk issuances are deepening Pakistan’s Islamic finance ecosystem, while increasing public trust in Shariah-compliant banking is driving deposit mobilisation and retail growth.
By the end of 2026, Islamic banking is expected to approach one-third of total banking deposits, cross Rs. 18–19 trillion in assets, and expand further across digital banking, SME finance, agriculture financing, and consumer lending.
If current growth trends continue, Islamic banking assets in Pakistan could exceed Rs. 25 trillion by 2028, strengthening the country’s position among the fastest-growing Islamic banking markets globally.
Speakers noted that the December 2026 figures represent indicative industry projections based on current trends and available data, and actual outcomes may vary depending on regulatory, economic, and market conditions.