Pakistan's Islamic banking assets projected to hit PKR 19T by December

Pakistan's Islamic banking assets are projected to reach PKR 18-19 trillion by December 2026, up from PKR 14.47 trillion at the end of 2025, according to industry estimates shared by Meezan Bank during its investors meeting.

Pakistan's Islamic banking assets stood at PKR 14.47 trillion at the end of December 2025. The industry's share in total banking assets is expected to climb to 25-27% by end-2026, up from 22.9% at the end of 2025.

Assets grew from PKR 5.27 trillion at the end of 2021 to PKR 14.47 trillion by December 2025, nearly tripling in four years.

How fast are Islamic banking deposits growing?

Islamic banking has expanded rapidly in Pakistan in the past few years due to a combination of legal pressure, regulatory measures and demand for Sharia-compliant financing instruments.

In April 2022, the Federal Shariat Court directed the government to eliminate interest and align the entire banking system with Islamic principles by 2027. In October 2024, Parliament passed a constitutional amendment requiring all forms of Riba to be eliminated by the end of 2027.

The deposits of Islamic banks are projected to increase to PKR 13.5-14.5 trillion by December 2026, compared with PKR 11.04 trillion at the end of 2025.

The sector's share in total banking deposits is expected to rise to 30-32% from 27.8% over the same period.

That would mean Islamic banking is approaching nearly one-third of all banking deposits in Pakistan by the end of 2026.

How much will Islamic financing portfolios grow?

The Islamic financing portfolio is projected to grow to PKR 7-7.8 trillion by December 2026, up from PKR 5.65 trillion in December 2025.

The growth reflects rising demand for Shariah-compliant financing across consumer, SME, agriculture, corporate, and government-linked segments.

If the current trajectory continues, Pakistan's Islamic banking assets could exceed PKR 25 trillion by 2028. That would put Pakistan among the fastest-growing Islamic banking markets globally.

Speakers at Meezan Bank’s briefing said the briefing said Islamic banking continues to expand at a strong pace in Pakistan.

Wider institutional adoption, growing Sukuk activity, and Pakistan's broader transition toward a Riba-free banking framework are also fueling growth.

Islamic banking assets grew by 23.1% in CY24 and 30.7% in CY25. The pace reflects strong underlying demand and rising customer confidence in Shariah-compliant products.

The Islamic banking branch network is projected to reach 7,300-7,800 branches by December 2026. That compares with more than 6,700 branches at the end of 2025.

Speakers said digital banking channels are also expected to play an increasingly important role in expanding access to Islamic financial services.

When will Pakistan complete its transition to Islamic banking?

Industry participants said the deadline for transition toward Islamic banking will continue to accelerate sector-wide transformation.

Both full-fledged Islamic banks and conventional banks with Islamic windows are expected to expand their product offerings and customer outreach.

Large sovereign Islamic financing requirements and Sukuk issuances are deepening Pakistan's Islamic finance ecosystem. Growing public trust in Shariah-compliant banking is driving deposit mobilization and retail growth.