The Institute of Cost and Management Accountants of Pakistan has conducted a detailed analysis of Pakistan`s Islamic banking sector, as per a press release, highlighting its rapid growth, key challenges, and future potential as the country moves toward full Shariah compliance by 2027.

According to the State Bank of Pakistan data for September 2024, Islamic banking assets grew by 17.4 per cent year-on-year to Rs9.88 trillion. Deposits increased by 23.3pc to Rs7.59tr, net financing rose by 7.5pc to Rs3.252tr, and investments grew by 22.3pc to Rs4.80tr. Islamic banking now represents 19pc of the total banking industry`s assets and 23.2pc of deposits.

Looking forward, Pakistan`s Islamic banking sector has strong growth opportunities. The government`s goal of fully Islamising the banking sector by 2027 will open new markets.

Emerging areas such as Islamic fintech, Takaful (Islamic insurance), and Sukuk (Islamic bonds), combined with rising global demand for ethical finance, will support this growth.

Strategic partnerships and investments from Gulf and Southeast Asian economies, along with government incentives for Islamic finance development, add further momentum.m