The concept of Islamic banking have been derived from the Holy Quran and Sunnah which were listed by Allah and the Prophet SAWW they guided us with the principles which under the rules of Shari’ah it guides us for those principles which are listed and help us in prohibition of interest which is generally known as Riba. It also prohibits from those activities which are considered to be Haram in Islam like the business of Alcohol. Islamic banking guides us with principles which are set for us to live like in the light of Islam.

Islamic banking in Pakistan has been on his tremendous growth since the past years and every bank has been looking forward to shift towards Islamic banking from conventional banking due to the benefits it has been offering. In 2002 Meezan bank was the first bank that was issued the license of Islamic banking in Pakistan since then there have been a tremendous growth in the banking dimensions till now. Many other banks have even diverted their focus from conventional banking to Islamic banking due to its benefits and growth that are provided through the system.

Islamic banking has its own role and significance performing under the rules of shari’ah it can perform tasks like resource mobilization along with that also can efficiently allocate them through its PLS accounts (musharka and mudarba) and other than that it can also utilize its other non PLS accounts (trading and leasing) which mostly base upon categories of modes which strengthen the payment systems to contribute significantly towards economic growth. The task to achieve maximum growth from Islamic banking and finance activities there should be and ensured environment which supports the system the economy of the country should even be focussing upon Islamic principles so that the concepts of Islam prevails and in accordance to shari’ah all the activities should be lawful which will result in maximum growth.

According to data from the State Bank of Pakistan, between 2002 and 2011, deposits at Islamic banks grew at an average annual rate of 59.6%, compared to the banking sector average of 16.1% per year during that same period. This data mostly shows up that the customers are driven towards the Islamic banking and mostly prefer the system which is owned by compliance of shariah. Islamic banking is still at its developing stage as the Islamic banking customers even use services through conventional banking as they provide better services due to which the Islamic banks are further working through providing the best services to their customers so that they could move from conventional banking to Islamic banking. But recent studies show that the deposits at Islamic banking are growing due to the customers which are switching from conventional banking towards Islamic banking. Meezan Bank and Bank Islami – have continued to add branches to their nationwide network, offering more customers the opportunity to switch their financial services to Shariah-compliance modes. Hence the Islamic banking still has some years to have massive growth in Pakistan.

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