Central bank says Pakistan Islamic banking assets at $40.7 billion by March end for first time

State Bank of Pakistan Governor Jameel Ahmad addresses a ceremony in Karachi, Pakistan, on May 20, 2025. (State Bank of Pakistan)
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Updated 20 May 2025
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Central bank says Pakistan Islamic banking assets at $40.7 billion by March end for first time

  • On deposits, Islamic banks currently hold Rs. 8.4 trillion, about 25.4 percent of the total deposits in the banking industry
  • Federal Shariat Court has ordered government to eliminate interest, align banking system with Islamic principles by 2027

ISLAMABAD: The governor of the Pakistani central bank said on Tuesday Islamic banking assets had for the first time reached Rs11.5 trillion ($40.7 billion) by the end of March this year, as the country actively moves toward implementing a fully Shariah-compliant financial system.

Pakistan’s Federal Shariat Court (FSC) directed the government in April 2022 to eliminate interest and align the country’s entire banking system with Islamic principles by 2027. Following the order, the government and the State Bank have taken several measures ranging from changing laws to issuing sukuk Islamic bonds to replace interest-based treasury bills and investment bonds.

“For the first time in the history of Islamic finance in Pakistan, by the end of March 2025, Islamic banking assets have reached Rs. 11.5 trillion, that’s 21.1 percent of the total banking sector assets,” central bank governor Jameel Ahmad said at a ceremony in Karachi. 

“While there’s still a long way to go, this share is gradually increasing.”

On deposits, Islamic banks currently hold Rs. 8.4 trillion, about 25.4 percent of the total deposits in the banking industry. 

“That means nearly one-fourth of all bank deposits are now mobilized under Islamic principles. So, the share of Islamic banking is steadily rising, and the number of Islamic banking branches has surpassed 8,000,” Ahmad added. “As a result of these achievements, we can see that access to Islamic banking services has significantly improved.”

He said to support the transformation of Islamic banking, the government of Pakistan had formed a steering committee in 2022 and launched a strategic five-year plan known as SBP Vision 2028.

Ahmad said the non-issuance of sukuk Islamic bonds was a “big hurdle” hindering the promotion of Islamic banking. He called on the banking industry, regulators and the government to play their “required role” to address underlying issues and issue more sukuk bonds and offer investors Shariah-compliant products.

“This would increase the share of Islamic banking investments in the overall industry. We all should play our respective role in this respect,” the governor added. 


Challenges for millions pushed back to Afghanistan from Iran, Pakistan

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Challenges for millions pushed back to Afghanistan from Iran, Pakistan

  • Over five million Afghans returned home since September 2023 as Iran, Pakistan ramp up deportations
  • Those who returned face challenges in form of unemployment, lack of housing, shortage of electricity and water

KABUL: After decades hosting Afghans fleeing crises at home, Pakistan and Iran have ramped up deportations and forced millions back across the border to a country struggling to provide for them.

Whether arriving at the frontier surrounded by family or alone, Afghan returnees must establish a new life in a nation beset by poverty and environmental woes.

AFP takes a look at the people arriving in Afghanistan and the challenges they face.

FIVE MILLION

More than five million Afghans have returned home from Iran and Pakistan since September 2023, according to the International Organization for Migration (IOM).

The figure equates to 10 percent of the country’s population, according to the agency’s deputy head in Afghanistan, Mutya Izora Maskun.

Three million returnees crossed the borders just last year, some of whom have spent decades living abroad.

Such a huge influx of people would be hard for any country to manage, Maskun said.

INADEQUATE HOUSING 

Months after arriving in Afghanistan, 80 percent of people had no permanent home, according to an IOM survey of 1,339 migrants who returned between September 2023 and December 2024.

Instead, they had to live in temporary housing made from materials such as stone or mud.

More recently, the UN refugee agency (UNHCR) spoke to Afghans who arrived back between January and August last year about their living arrangements.

Three-quarters of tenants said they could not afford their rent, while the majority of families were sharing rooms with up to four people, according to the survey of 1,658 returnees.

DESPERATE SEARCH FOR WORK 

Just 11 percent of adults pushed back from Pakistan and Iran were fully employed, the IOM survey found.

For those who returned in the first few months of last year, the average monthly income was between $22 and $147, according to the UNHCR.

WATER, ELECTRICITY SHORTAGES

More than half the returnee households lack a stable electricity supply, according to the IOM.
The agency said that households headed by women faced “significantly higher vulnerabilities,” with around half of them struggling to access safe drinking water.

SPEEDING UP LAND DISTRIBUTION

More than 3,000 plots of land have been distributed to returnees nationwide, Hamdullah Fitrat, the Afghan government’s deputy spokesman, said in mid-January.

The process “was accelerated,” he said while recounting a special meeting with supreme leader Hibatullah Akhundzada.

On their arrival in Afghanistan, returnees usually receive help with transport, a SIM card and a small amount of money.