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PAGE: YOUR VIEWS ON GROWTH OF ISLAMIC BANKING IN PAKISTAN:
IRFRAN SIDDIQUI: Islamic banking has successfully paved its way into the mainstream financial system in Pakistan in a few decades. As one of the largest Muslim majority countries of the world, Pakistan's evolution and transition towards Islamic banking has been phenomenal. Meezan Bank, which is the first and largest Islamic bank of Pakistan, has played a pioneering role in the implementation of Islamic banking in the country. The general awareness towards Islamic banking in the country is increasing and the share of Islamic banking in total deposits of the banking industry has grown over 12 percent in the year 2015.
The State Bank of Pakistan has repeatedly confirmed the overwhelming and distributed demand for Islamic banking in the urban and rural areas of the country.
For Pakistan, Islamic banking holds great significance, as a large segment of the population is still unbanked. The government too has launched an extensive National Financial inclusion Strategy that allows Islamic banks to focus on areas of agriculture, SME and microfinance, currently, Pakistan harbours a population of almost 220 million, out of which 70 percent remains essentially unbanked. For Islamic banks, the positive perception associated with their banking mechanisms and the untapped market is an immense opportunity for further growth. As the government focuses more on a financial inclusion strategy: there is likely to arise a more favourable environment for Islamic banks that will promote development of partnerships and creation of innovative delivery channels.
The number of bank account holders in the country still remains a feeble figure. The extent of the barrier creates in socio-economic development of the country is indeed massive, in order to accomplish the financial inclusion goals set by the State Bank of Pakistan, a number of Islamic Financial institutions are now eyeing Islamic microfinance models and exploring the possibilities of their implementation in the region, we are...