Islamic Finance: Challenges of Islamic Banking in Pakistan

Abstract:

Islamic finance is growing with remarkable pace, especially Islamic banking,a major segment of Islamic finance, is expanding rapidly. This valuates position of Islamic finance and Islamic banking, around the world in general and particularly in Pakistan. History of Islamic banking in Pakistan is protracted and at present this sector is growing significantly. However Islamic banking is confronting with number of challenges, which restrain it from sustainable growth in Pakistan. Growth level of Islamic banks should be steeper to contribute substantial share in country’s economy. It is important to formulate effective policies, at institutional and operational level to address these challenges through close collaboration of key stakeholders.