Islamic Banking and Finance: Current Developments and its Future Prospects

Abstract

The study focuses on Islamic banking and finance in Pakistan, its current tendencies and future possibilities. It has experienced phenomenal growth. State Bank of Pakistan wants to develop a moderate and sound Islamic Banking System that is in line and viable with the worldwide financial sector, giving creative Shariah agreeable products and services in order to accomplish even handed economic growth. Currently Islamic banks are offering various Sharia compliant Islamic modes of financing including Murabaha, Musawamah, Mudaraba, Musharaka, Ijarah, Salam, Istisna, Wakala and Islamic Export Refinance. The study determines that the future of Islamic banking is very bright and it requires further many steps to be taken to reach its potential. One of those most important steps is to create awareness about Islamic banking. Islamic Banking Creating Awareness programs include Islamic Banking Awareness Program, Islamic Banking Bulletin, Video Conferences, Business Review Meetings, Quarterly Meetings with the Heads of IBIs and National Institute of Banking & Finance (NIBAF). Fatherly the step that needs to be taken is to extend its outreach. This will be done by growing the branch network in the current Banking segment and broadening further into fresher sections of Microfinance, Horticulture finance and small and Enterprise Finance.