ISLAMABAD: Kuwait Investment Authority-backed Raqami Islamic Digital Bank (RIDB) plans to begin operations in Pakistan next month with a $100 million investment, Pakistan’s finance adviser said on Friday, marking another Gulf-backed entry into the country’s banking sector.

The bank will be Pakistan’s first fully digital Shariah-compliant bank, according to its website. It offers online financing, savings and payment services to individuals and small and medium-sized enterprises, with a focus on financial inclusion for underserved segments.

The development comes as Pakistan seeks to attract foreign investment, particularly from Gulf nations, to bolster its economy and stabilize its finances following years of macroeconomic stress. In 2024, the State Bank of Pakistan issued a no-objection certificate to RIDB.

“Kuwait Investment Authority-backed Raqami Bank is set to launch in Pakistan with a $100 million investment,” Finance Adviser Khurram Schehzad said in a post on X.

“This is a strong vote of confidence in Pakistan’s improving economic outlook and reform momentum,” he added. “Raqami Islamic Digital Bank is gearing up to begin operations next month.”

Schehzad said Raqami was backed by the State of Kuwait’s sovereign wealth fund and that its entry into Pakistan reflected strengthening investment ties between Pakistan and Kuwait, particularly in the financial and digital economy sectors.

Earlier this month, Bank Islami launched Pakistan’s first Shariah-compliant QR payment gateway, enabling real-time online payments that allow customers to pay instantly from their bank accounts and merchants to receive payments securely through digital channels.

Pakistan’s banking sector is among the more resilient parts of the economy, dominated by a handful of large lenders with strong capital buffers and profits driven largely by holdings of government securities.

While high interest rates have lifted bank earnings, private-sector credit growth remains subdued.