KARACHI (Dunya News) – Pakistan’s rapidly expanding Islamic banking system has climbed to the fifth position globally, according to a survey report issued by the State Bank of Pakistan and financial institutions.
The report stated that Islamic banking assets in Pakistan are expected to reach Rs19 trillion by December 2026 and could rise further to Rs25 trillion by 2028. Islamic banking deposits are also projected to increase to between Rs13 trillion and Rs14 trillion by the end of 2026.
According to the survey, the share of Islamic deposits is likely to increase from 27.8 per cent to 32 per cent, while Pakistan’s Islamic financing portfolio is expected to exceed Rs7 trillion this year, up from Rs5 trillion.
The report further noted that Islamic banking’s share in Pakistan’s overall banking system is expected to grow from 22.9 per cent to 27 per cent during the current year.
Official figures showed that Islamic banking assets stood at Rs5 trillion in 2021 before surging to Rs14.5 trillion by December 2025. The sector recorded growth of 23.1 per cent during 2024 and 30.7 per cent in 2025.
The Islamic banking branch network has also continued to expand steadily, with the number of branches projected to rise from 7,300 to 7,800 by December 2026.
The report highlighted that Islamic banking’s share in government financing has increased to 14 per cent following sustained growth. For the first time, the government issued hybrid Sukuk worth Rs200 billion in April, while plans are under consideration to issue Sukuk valued at Rs3.41 trillion by 2027.
It added that the total value of Islamic Sukuk has risen significantly over the past five years, increasing from Rs561 billion to Rs2.05 trillion.