Islamic Banking Share Reaches 24% in Pakistan, Assets Expected to Hit Rs. 19 Trillion by 2026

Karachi: Islamic banking in Pakistan is witnessing rapid expansion as its share in the country’s overall banking sector has reached 24%, according to new data shared during a media briefing in Karachi.

Officials pointed out that Islamic banking assets have been projected to witness a substantial rise, as financial infrastructure is being expanded and demand from customers is increasing with an estimated of Rs 4,500 billion in the current year.

Islamic Banking to Reach Rs. 18–19 Trillion by 2026

According to the industry estimates, banking assets of Islam may valued at Rs. 18 trillion and Rs. 19 trillion by December 2026, marking one of the fastest growth phases in the sector’s history.

Similarly, Islamic banking deposits expected to rise sharply by Rs. 1,000 billion, reaching approximately Rs. 14.5 trillion by the end of 2026.

Key Drivers of Growth in Islamic Banking

Experts and presenters at the briefing pointed to several factors fueling this expansion, including:

• Increasing customer preference for Shariah-compliant banking
• Ongoing regulatory improvements in the financial sector
• Expansion of Islamic banking branch networks across Pakistan
• Rising activity in Sukuk (Islamic bonds) markets
• Gradual shift toward an interest-free financial system

Government Borrowing Structure Identified as Challenge

The continued dependence on traditional borrowing instruments like Treasury Bills has also mentioned as a hurdle to the development of Islamic banking, the speakers added.

Increased use of Sukuk financing would be expected to help integrate government borrowing with Islamic financial principles and aid sector development, they added.

Meezan Bank Media Briefing Highlights Sector Outlook

Meezan Bank organised the media briefing in Karachi, where top officials of the bank, including Ahmed Ali Siddiqui, Group Head consumer finance, senior Sharia audit and customer support officials, briefed the media on Islamic banking and its future prospects in Pakistan.

The briefing highlighted strong momentum in the sector, reinforcing expectations that Islamic banking will continue to gain a larger share of Pakistan’s financial system in the coming years.