Pakistan’s outstanding government Sukuk portfolio crosses PKR 10 trillion

Pakistan’s government Sukuk portfolio has crossed PKR 10 trillion in both outstanding value and cumulative issuances, marking a significant expansion of the country’s Islamic capital market.

Meezan Bank commemorated the milestone at an event in Islamabad attended by representatives of the Ministry of Finance, the State Bank of Pakistan (SBP) and other financial institutions involved in developing the sovereign Sukuk market.

The Government of Pakistan issued PKR 4.179 trillion in Sukuk between January and October 31, 2026, more than double the PKR 2.052 trillion issued during the whole of 2025.

The expansion has been supported by new issuance structures, regulatory facilitation and increased participation from financial institutions, according to the bank.

New structures expand Sukuk market

Since 2008, government Sukuk have primarily been issued under the Ijarah structure, which links issuance to the availability of tangible government-owned assets.

To increase issuance capacity, the government introduced a hybrid structure combining Ijarah with Commodity Murabaha. This allows a larger volume of Sukuk to be issued using the same asset base.

The introduction of tradable three-month and six-month Sukuk has also addressed a gap in the short-term segment of Pakistan’s sovereign Islamic yield curve, providing benchmarks for pricing across the broader Islamic finance market.

The event was attended by Finance Minister Senator Muhammad Aurangzeb, who was the chief guest, and SBP Governor Jameel Ahmad. Khurram Schehzad, Adviser to the Finance Minister on Economic and Financial Reforms, and other senior Ministry of Finance officials were also present.

Justice (retd.) Mufti Muhammad Taqi Usmani, chairman of Meezan Bank’s Shariah Board, delivered the keynote address.

Meezan Bank President and CEO Dr Syed Amir Ali acknowledged the role of the Ministry of Finance and the SBP in expanding Pakistan’s sovereign Sukuk market.

Aurangzeb also recognised the contributions of the central bank and the joint financial advisers in reaching the milestone.

Dr Muhammad Imran Ashraf Usmani, a member of Meezan Bank’s Shariah Board, said the introduction of short-term Sukuk could provide a viable alternative to conventional Treasury bills and support the transformation of Pakistan’s financial system.