Karachi: The State Bank of Pakistan (SBP) recently launched the third five-year plan for Islamic banks, in order to expand the share of such banks in the overall banking industry in the coming five years, according to a news report published on April 6.
The aforementioned plan anticipates the share of Islamic banks to rise up to 35%, alongside the shares of small and medium enterprises (SMEs) and agriculture financing to 10% and 8% respectively, in the next five years.
The SBP noted the massive potential and demand for Islamic banking as the industry has become a prominent sector in banking overall. Currently, 22 Islamic banking institutions (including 5 Islamic banks and 17 conventional banks with standalone Islamic banking branches) are offering products and services which adhere to Sharia, through a massive network of 3,456 branches and 1,638 dedicated counters across the country.
Furthermore, the strategic plan lays down a direction for Islamic banking in order to reinforce the existing momentum, with particular focus on strengthening legal landscape, regulatory framework, Sharia governance and better liquidity management. Moreover, Islamic banks are encouraged to develop Sharia compliant products and services to better aid sectors in financial assistance, particularly SMEs and agriculture finance which were deemed essential for the growth of the economy.
Lastly, SBP stated that it fully expects the Islamic Banking sector to become a vibrant and sustainable system in the coming years.
