- Islamic banking branches expanded nationwide, strengthening financial inclusion and deepening Pakistan’s Islamic finance system
Islamic banking in Pakistan follows Shariah principles through avoiding interest (Riba) and focusing on profit and loss sharing, trading, and investment. The State Bank of Pakistan (SBP) regulates and promotes a stable and competitive Islamic finance system. The industry consists of full-fledged Islamic banks and conventional banks with standalone Islamic banking branches, offering Shariah-compliant products across various sectors.
As per SBP report released in June 2025, the Islamic banking industry in the country sustained its strong growth trajectory during the second quarter of 2025, further consolidating its role in the financial system. By end-June 2025, statistics showed that total assets had grown by Rs 834 billion, standing to Rs 12,344 billion, while deposits registered an even sharper rise of Rs 1,114 billion, taking the total to Rs 9,533 billion. On a year-on-year basis, assets and deposits posted robust growth of 27.4 percent and 29.5 percent, respectively. SBP also reported in the report that the financing portfolio also registered a healthy year on year (YoY) growth of 16.9 percent, standing Rs 4,033 billion, whereas net investments grew sharply by 32.2 percent to Rs 5,935 billion. This performance represents a rising demand for Shariah-compliant financing and investment opportunities, improving the sector’s financial depth. In terms of market positioning, Islamic banking assets accounted for 20.7 percent of the overall banking industry of the country, while deposits captured a higher share of 25.5 percent. The sector’s contribution to total financing reached at 30.5 percent, with investments making up 15.8 percent of the banking system’s total, highlighting its expanding footprint.
It is also registered that the industry’s outreach also grew considerably. Islamic Banking Branches (IBBs) grew to 6,395, reflecting a 23.1 percent YoY rise, while Islamic Banking Windows (IBWs) climbed to 2,735, explaining an impressive 32.3 percent YoY growth. This expansion has further enhanced access to Islamic financial services in our country.
Overall, these trends underscore not only the industry’s consistent growth but also its deeper integration into Pakistan’s banking landscape. The steady improvement in financial indicators and the widening branch network reflect both the resilience of the sector and the growing consumer demand for Islamic banking.
Report also showed that Islamic Banking Institutions (IBIs) in Pakistan consist of six full-fledged Islamic banks and 15 conventional banks offering Shariah-compliant services by dedicated Islamic Banking Branches (IBBs). In the second quarter of 2025, the industry witnessed a net addition of 302 branches, marking a quarterly growth of 4.96 percent and growing the total IBB network to 6,395 branches by June 2025. No doubt, IBBs are now spread across 132 districts, underscoring the sector’s enlarging geographic footprint and its growing role in promoting financial inclusion. At the same time, Islamic Banking Windows (IBWs) sustained their upward momentum, reaching 2,735 by June 2025, a YoY growth of 32.3 percent, further strengthening public access to Shariah-compliant financial services.
Sources recorded that Pakistan’s BankIslami presently has been named the best Islamic banking brand at the Global Islamic Finance Awards (GIFA) 2025 in Kuala Lumpur, Malaysia, earning international recognition for innovation, customer-centric services and contribution to the growth of Islamic finance in the country. It is important to note that GIFA is a globally recognized platform that honors institutions and individuals for contributions to Islamic banking and finance. The bank has played a pioneering role in developing Pakistan’s Islamic finance landscape, from deploying biometric ATMs to introducing Islamic digital banking solutions. Advancing Riba-free banking in Pakistan is a national cause, and as a financial institution.
