Karachi: According to a recent news report, in order to increase the share of Islamic banks in the overall banking industry over the next five years, the State Bank of Pakistan (SBP) recently launched the third five-year plan for Islamic banks.
In the next five years, according to the aforementioned strategy, Islamic banks’ share of the market will rise to 35%, while SMEs’ and agriculture financing’s shares will rise to 10% and 8%, respectively.
The SBP recognized Islamic banking’s enormous potential and demand, noting that the industry has grown to become a significant part of the banking industry as a whole. Through a vast network of 3,456 branches and 1,638 dedicated counters across the country, 22 Islamic banking institutions (including 5 Islamic banks and 17 traditional banks with standalone Islamic banking branches) are currently providing Sharia-compliant products and services.
Furthermore, the strategic plan establishes a course for Islamic banking in order to maintain momentum, with an emphasis on improving the legal environment, regulatory structure, Sharia governance, and liquidity management. Furthermore, Islamic banks are encouraged to establish Sharia-compliant products and services in order to better assist financial assistance sectors, especially SMEs and agriculture finance, which are deemed critical to the economy’s development.
Finally, the SBP reported that it fully expects the Islamic Banking sector to develop and thrive in the coming years.