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Islamic
finance is one of the fastest-growing segments of today's banking industry.
Formerly deemed as a marginal industry, Islamic finance is now recognized as a
vital and thriving industry. While the size of Islamic finance and banking
activities, estimated to range from $500bn to $1,000bn, is still a fraction of
conventional banking, the impressive growth rates of 10ñ15% seen in recent years
emphasize the potential market for such activities. From the late 70s onwards,
Pakistan has had a protracted history of Islamic banking. On 1st July, 1985 all
commercial banking in Pakistani rupees became interest free. The sudden
conversion and lack of preparedness posed difficulties for the implementation of
this practice.
A growth of 40% per annum is expected
and 15% market share is targeted. Conventional banks are allowed to operate
Islamic bank subsidiaries or even standalone Islamic banking branches along-side
full-fledged Islamic bank..... |
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