The State Bank of Pakistan published a five-year strategic plan for the Islamic banking industry to increase the share of deposit and assets of Islamic banks to 30 per cent in the banking industry as a whole.

The five-year plan (2021-2025) foresees a 35% share of Islamic banks in the countrywide network of branches of the banking industry, 10% for small and medium-sized companies and 8% in agricultural financing, respectively, for lending the private sector. Currently, the Islamic banking industry has a market share of 17 percent and 18.3 percent of assets and deposits, respectively, at the end of December 2020.

SBP aims to turn Islamic banking into one-third of the entire banking industry by 2025.Considering the possibility of ensuring broad economic growth and development, Islamic banking services remained the top priority of the strategic plan.

SBP said that the Islamic banking industry has expanded its presence in the country’s banking system. Currently, 22 Islamic banking institutions (five full Islamic banks and 17 traditional banks with independent Islamic bank branches) offer Sharia-compliant products and services through a network of 3,456 Islamic bank branches and 1,638 Islamic bank windows (dedicated ). in traditional branches). in 124 regions of the country.

To guide the growth of Islamic banking on solid foundations, SBP provides proactive leadership in issuing strategic plans for the Islamic banking industry. The message added that two five-year strategic plans have been published so far.

This plan aims to set a strategic direction for the Islamic banking industry to consolidate the current progressive momentum and take it to the next level of growth. He added that the plan was developed in close coordination and consultation with all key stakeholders.

The strategic plan contemplates the achievement of the established goals by focusing on six strategic directions, including the strengthening of the legal framework; Strengthening the regulatory framework and promoting a comprehensive governance framework for Sharia. Improve the liquidity management system, expand communications and market development, increase human capital and raise awareness.

The plan provides a consensus-based agenda and strategy to make Islamic banking an efficient and viable solution for clients. It also focuses on improving the public perception of Islamic banking as a distinct and viable system capable of meeting the needs of various financial services of different segments of society, which would contribute significantly to enhancing comprehensive financial inclusion in Pakistan.

The plan also states that Islamic banking institutions must develop innovative products based on distinctive legal features to meet the needs of disadvantaged sectors, especially small and medium-sized enterprises and agriculture, which are essential for the country’s economic growth.

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