Pakistan's bumpy road to Islamic finance goals

Pakistan has pledged to become fully sharia-compliant in its banking services by December 2027, but still has a long way to go to create a banking industry that provides the services its customers want. According to a Fitch research note, the country could see its Islamic banking sector reach 25 per...

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Bibliographic Details
Published in:The Banker 2024-03, p.52
Main Author: Long, Kimberley
Format: Article
Language:English
Subjects:
Banking industry
Central banks
Compliance
International banking
Islamic financing
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Summary:Pakistan has pledged to become fully sharia-compliant in its banking services by December 2027, but still has a long way to go to create a banking industry that provides the services its customers want. According to a Fitch research note, the country could see its Islamic banking sector reach 25 per cent of its assets in the medium term, a number that falls short of the SBP's target of 30 per cent of assets and deposits by 2025. According to the Fitch research note: "While the regulatory exemption may support Islamic banks' profitability through lower cost of funding, their competitiveness could reduce if they offer lower deposit rates than conventional banks."
ISSN:0005-5395