The State Bank of Pakistan (SBP) has granted in-principle approval to five financial institutions to begin Islamic banking operations, in a move aimed at expanding Shariah-compliant finance across the country.
The institutions cleared for entry into Islamic banking include Samba Bank Limited, HBL Microfinance Bank, ASA Microfinance Bank, Sindh Microfinance Bank, and Pak Libya Holding Company.
According to the central bank, it is working closely with these organisations and providing regulatory support to help them set up Islamic banking operations in line with required standards and compliance frameworks.
In earlier approvals during 2025, SBP also allowed Mashreq Bank, Mobilink Microfinance Bank, and LOLC Microfinance Bank to launch Islamic banking services, reflecting a steady increase in participation in the sector.
The regulator said demand for Islamic financial services continues to grow across banks, microfinance institutions, and development finance bodies, driven by strong customer interest in Shariah-compliant products.
Its Financial Stability Review noted that this rising trend shows both the expansion of Islamic banking in Pakistan and the financial sector’s shift toward evolving customer preferences.
To further promote awareness, SBP has supported a nationwide outreach campaign using digital and social media platforms to improve public understanding of Islamic banking.
At present, Pakistan’s Islamic banking system includes 22 institutions in total, with six full-fledged Islamic banks and 16 conventional banks operating dedicated Islamic banking windows.
