Pakistan’s banking sector is experiencing a profound transformation, with financial inclusion among adults rising to 67% in 2025 from just 47% in 2018. Yet, inclusion alone is not enough. Customers increasingly demand ethical, tech-forward, and accessible banking solutions—a demand that is driving the growth of Islamic digital finance across the country.
By June 2025, Islamic banking assets in Pakistan had reached PKR 12.3 trillion, accounting for 20.7% of total banking assets, while deposits stood at PKR 9.5 trillion, representing 25.5% of industry deposits. The sector has expanded its physical presence as well, with 6,395 Islamic branches and 2,735 Islamic banking windows nationwide. Growth from Q1 to Q2 2025 highlighted sector resilience, with assets up 7%, deposits up 13%, and net investments rising 9.4%, driven largely by strong Sukuk subscriptions.
The State Bank of Pakistan’s Vision 2028, aligned with directives from the Federal Shariat Court, is guiding a phased transition toward a fully Shariah-compliant banking system by the end of 2027. This policy framework has opened opportunities for institutions to develop compliant and digitally future-ready banking models.
Among these institutions, Mashreq Pakistan has emerged as a pioneer in Islamic digital banking, bringing over five decades of global experience and deep digital expertise to the market. Shahzad Khokhar, SEVP & Head of Islamic Banking at Mashreq Pakistan, emphasizes that legacy banking models—with multiple physical touchpoints and limited transparency—cannot meet modern customer expectations. Mashreq aims to eliminate these barriers with a digital-first, fully compliant banking experience, offering secure onboarding, intuitive interfaces, and real-time account visibility.
Pakistan’s young population, with approximately 67% under 30 and nationwide mobile teledensity near 79.38% as of August 2025, creates an ideal environment for digital financial solutions. Mobile- and internet-banking transactions reached 1.346 billion in FY24, up 62% YoY, with transaction values growing 74% to PKR 70 trillion. Branchless banking continues to scale, processing 2.697 billion transactions, while EMI-issued e-wallets recorded 85 million transactions, reflecting 85% growth YoY.
Shahzad notes that Mashreq’s platforms are designed to be inclusive and intuitive, enabling even first-time users to access Shariah-compliant financial services. By prioritizing financial literacy and trust, the bank is empowering underserved groups, including women, youth, and SMEs, while providing high-profit yielding Islamic savings accounts and hybrid products that combine transactional and savings benefits.
The bank’s selection for Pakistan’s first pilot digital bank license and subsequent commercial launch in September 2025 reflects strong regulatory support and alignment with Pakistan’s economic vision. Mashreq Pakistan aims not merely to compete for market share but to spark a movement—merging digital infrastructure, Shariah principles, and customer-centric design to redefine banking nationwide.
As Pakistan approaches its NFIS target of 75% financial inclusion by 2028 and works to reduce the gender gap in financial access, Mashreq Pakistan is positioned to play a central role in accelerating the adoption of ethical, digital, and inclusive financial services, shaping the future of Islamic banking in the country.
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