Islamic banking’s commendable growth
Economic Survey also shows that the asset base of Islamic Bank ing Industry (IBI) during the calendar year 2015 stood at Rs. 1.61 trillion compared to Rs. 1.3 trillion in 2014, registering a growth of 27.87 percent. The deposits of the IBI reached to Rs. 1.4 trillion during the year as against Rs. 1.1 trillion a year ago.
The data is reflective of growing popularity of Islamic banking in Pakistan and faith of the people in the Islamic modes of financing. Pakistan’s overall banking sector is vibrant but these figures point to a gradual but welcome shift towards Islamic banking, which is considered to be the best solution to the present-day ills of the economy. Going by the fact that Pakistan has begun its journey in Islamic banking somewhat recently, this is of course, impressive growth of the sector. The permission to Islamic banking system to operate in parallel with the conventional banking has provided a choice to the consumers. A large number of Pakistanis have been evasive to the commercial banking because of their strong belief against Riba-based banking. These individuals and firms - mainly middle and low class - now have the opportunity to invest in trade and businesses by availing of loans from Islamic banks and thus expand economic activity and employment. Several full-fledged Islamic banks have already opened the doors for business and many conventional banks have instituted branches exclusively dedicated to Islamic banking products and services. We believe that this growth in Islamic banking is the direct result of the Strategic Plan of the State Bank of Pakistan, which crystallized relevant issues and provided guidelines for growth of the sector in the country. However, it has been observed that the pace of conformation of Islamic modes of financing to Shariah requirements has not been satisfactory and with this in view there is need for intensive interaction between financial experts and Islamic scholars to place Islamic banking on firm footings.