Islamic banking in Pakistan has made significant strides over the past year, with Shariah-compliant branches now accounting for nearly 42 percent of the country’s total banking network. According to the latest data from the State Bank of Pakistan (SBP), the nation had 7,562 full-fledged Islamic banking branches and 2,931 Islamic banking windows at the end of 2025. These facilities are operated both by dedicated Islamic banks and the Islamic banking divisions of conventional banks, reflecting growing public demand for interest-free financial services.
This expansion marks a notable increase from 2024, when Islamic banking branches made up 31.5 percent of the industry network, with 5,854 branches and 2,253 windows. The growth trend aligns closely with government directives and the Federal Shariat Court’s plan to convert Pakistan’s interest-based banking system into a fully Shariah-compliant framework by 2028. This ambitious transformation aims to provide accessible, interest-free financial services while promoting financial inclusion across the country.
Currently, Pakistan hosts seven full-fledged Islamic banks, including prominent names such as Meezan Bank and BankIslami, alongside 15 conventional banks offering dedicated Islamic banking services. Among the largest contributors to this growth, United Bank Limited (UBL) operates 752 Islamic branches and 596 windows, while Habib Bank Limited (HBL) manages 608 branches and 506 windows. Meezan Bank, widely recognized for its Shariah-compliant operations, runs 1,105 branches, while Faysal Bank maintains 898 branches, and the National Bank of Pakistan (NBP) offers 312 Islamic branches alongside 350 windows.
Industry officials project continued expansion throughout 2026 as conventional banks accelerate the conversion of their interest-based operations to comply with Shariah standards. The growth is expected to be further driven by increasing awareness among customers and businesses seeking ethical banking solutions, as well as broader regulatory support from SBP for the development of Islamic finance in Pakistan.
Despite the strong growth, the sector faces challenges, particularly a shortage of skilled professionals trained in Shariah-compliant banking, risk management, and Islamic financial instruments. Experts suggest that addressing these workforce gaps will be critical to sustaining the rapid expansion of the Islamic banking network while ensuring high-quality service delivery.
The increasing share of Islamic banking branches also indicates a structural shift in Pakistan’s financial landscape, signaling opportunities for innovation in digital banking, fintech solutions tailored to Shariah compliance, and specialized product offerings in consumer, corporate, and investment banking segments. The combined focus on expanding branch networks, professional development, and product innovation positions Pakistan to achieve its 2028 goal of a fully interest-free banking system, potentially transforming the country into a regional hub for Islamic finance.
As Pakistan continues to invest in Shariah-compliant banking infrastructure, the evolving ecosystem offers enhanced financial accessibility, promotes ethical finance, and strengthens the country’s competitiveness in global Islamic finance markets. The expansion of branches and windows demonstrates both regulatory commitment and the banking sector’s readiness to meet growing demand for interest-free financial services across urban and rural areas.
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