The State Bank of Pakistan (SBP) has granted in-principle approval to five financial institutions to launch Islamic banking operations, further expanding the country’s growing Shariah-compliant finance sector. The move reflects increasing demand for Islamic banking products and services across Pakistan.
The approved institutions include Samba Bank Limited, HBL Microfinance Bank, ASA Microfinance Bank, Sindh Microfinance Bank, and Pak Libya Holding Company. According to the central bank, these institutions will establish Islamic banking operations in accordance with regulatory and Shariah compliance requirements.
The SBP stated that it is actively supporting the approved institutions by providing regulatory guidance and technical assistance to ensure the effective setup and smooth functioning of their Islamic banking services. The initiative forms part of the central bank’s broader efforts to strengthen Pakistan’s Islamic finance industry.
Earlier in 2025, the SBP also permitted Mashreq Bank, Mobilink Microfinance Bank, and LOLC Microfinance Bank to begin offering Shariah-compliant banking services. The approvals indicate growing interest among financial institutions in entering Pakistan’s expanding Islamic banking market.
According to the central bank, public demand for Islamic financial products continues to rise steadily, encouraging commercial banks, microfinance institutions, and development finance companies to increase their participation in the sector. Consumers are increasingly seeking banking solutions that align with Islamic principles, contributing to the industry’s rapid growth.
The SBP’s Financial Stability Review noted that the continued expansion of Islamic banking demonstrates the financial sector’s responsiveness to evolving market trends and customer preferences. The report also highlighted the increasing role of Islamic finance in Pakistan’s overall banking landscape.
To support further growth and public awareness, the SBP has launched nationwide awareness campaigns through social media platforms aimed at educating people about Islamic banking services and their benefits. The campaigns are designed to improve financial literacy and promote broader adoption of Shariah-compliant banking solutions.
At present, Pakistan’s Islamic banking network consists of 22 institutions, including six full-fledged Islamic banks. In addition, 16 conventional banks are operating dedicated Islamic banking branches and windows alongside their traditional banking services.
Industry experts believe the latest approvals will strengthen competition in the banking sector, improve access to Islamic financial services, and support Pakistan’s long-term objective of expanding Islamic finance nationwide.