In Digital transformation as per the present report of State Bank of Pakistan (SBP), Pakistan’s banking sector continues to register meaningful progress, with a growing focus on Shariah-compliant financial services. Under the strategic direction of SBP, two pioneering institutions — Raqami Islamic Digital Bank Limited and Mashreq Bank Pakistan Limited were licensed to commence Islamic banking operations. Furthermore, Easypaisa Bank Limited has been granted in-principle approval to extend Islamic financial services during the quarter ended March 2026. Early performance indicators for the first quarter of 2026 reflect encouraging momentum in this emerging segment: total Islamic assets of digital banks grew to Rs 11.91 billion as of end-March 2026, representing a significant QoQ expansion of 72.5 percent from Rs 6.90 billion as of end-December 2025. Deposits exhibited even stronger growth, reaching Rs 4.0 billion as at March 2026, as against to Rs 1.48 billion as of December 2025 showing growth of 171 percent. These outcomes highlight the growing confidence in digital Islamic banking solutions, reinforcing their role in expanding financial inclusion and strengthening the digital finance landscape in our country. Statistics showed that the total assets of IBIs expanded by Rs 192 billion in the quarter ended March 2026, reaching to Rs 14,659 billion, up from Rs 14,467 billion in the previous quarter. Islamic banking assets comprise a 23.0 percent share of the overall banking industry, reflecting its rising market importance. A deeper look reveals that the asset composition comprises of financing (net) 38.1 percent, while investments (net) contribute 48.3 percent of total Islamic banking assets. Further, the rise in the assets is mostly contributed by the increase in investments. SBP officials recorded that IBs registered a fall of Rs 60 billion reaching at Rs 8,380 billion, whereas IBBs continued to post steady growth to settle at Rs 6,279 billion by increasing Rs 252 billion on QoQ basis. As of March 2026, IBs accounted for 57.2 percent of total Islamic banking assets, with IBBs contributing the remaining 42.8 percent. The numbers provide a growing demand for Shariah compliant products by the customers. IBIs also continued to enhance their investment portfolios during the quarter, with net investments growing by Rs 475 billion, reaching Rs 7,081 billion by end-March 2026. This increase was largely supported by allocations in various the government of Pakistan Ijarah Sukuk (GIS). Officials also recorded that examining the composition reveals that IBBs of conventional banks boosted their net investments by Rs 296 billion, bringing the total to Rs 2,982 billion. Moreover, IBs recorded growth, increasing by Rs 179 billion to stand at Rs 4,098 billion. IBs maintained leadership with 57.9 percent of overall net investments, while IBBs accounted for 42.1 percent. On the other hand, financing and related assets registered a slight fall , reaching Rs 5,581 billion by the end of March 2026, down from Rs 5,654 billion in December 2025, an overall fall of Rs 73 billion. The financing of IBs declined by Rs 228 billion to Rs 3,074 billion, whereas IBBs registered a rise of Rs 156 billion, taking their financing portfolio to Rs 2,507 billion. A product wide review of the financing establishes that Diminishing Musharaka represents 34.0 percent of the total financing portfolio, followed by Musharaka with a 25.7 percent share. Both Murabaha and Istisna are closely following each other, with Istisna leading at 10.1 percent and Murabaha following at 9.2 percent of financing. The remaining 21 percent was distributed among all other modes of financing undertaken by IBIs in Pakistan.
| Pakistan: Sector wise Financing (Share in %) | ||||
|---|---|---|---|---|
| Sector | Mar-25 | Dec-25 | Mar-26 | Overall Banking Industry |
| Chemical and Pharmaceuticals | 6.8 | 6.5 | 6.5 | 4.2 |
| Agribusiness | 13.2 | 12.4 | 10.6 | 11.0 |
| Textile | 18.0 | 15.0 | 14.4 | 16.2 |
| Cement | 1.7 | 1.5 | 2.4 | 1.8 |
| Sugar | 5.1 | 3.5 | 6.2 | 4.7 |
| Shoes and leather garments | 0.3 | 0.3 | 0.3 | 0.3 |
| Automobile and transportation equipment | 1.2 | 1.3 | 1.3 | 1.0 |
| Financial | 1.2 | 1.3 | 1.3 | 2.8 |
| Electronics and electrical appliances | 1.3 | 1.7 | 1.5 | 1.3 |
| Production and transmission of energy | 6.9 | 16.4 | 15.7 | 12.1 |
| Individuals | 8.3 | 7.2 | 8.0 | 8.5 |
| Others | 36.0 | 32.9 | 32.0 | 36.1 |
| Total | 100 | 100 | 100 | 100 |
