Growth of Islamic banking in Pakistan


  • Khakan Najaf Department of Accounting & Finance, University of Lahore, Islamabad Campus, Pakistan
  • Shumraiz Ashraf Department of Accounting & Finance, University of Lahore, Islamabad Campus, Pakistan


Conventional banks, Shariah complaint, State bank, Financial stability, AID model


Our founder Quaid –e-Azam was very much interested in the Islamic banking in our country .The prime objective of state bank is to remove interest system from the Pakistan. In 1970 s Islamic banking was not famous, but at the start of twenty century it is very common in all over the world. Islamic banking is account value approximately USD 500 billion. It is growing with the ratio of 11-15%.Islamic banking is flourishing dynamically in also Pakistan like other countries, since January, 1981 it is very famous in Pakistan. All over the world financial stability has a crucial role. From the last 30 years Islamic banking has scope in the world. At this time, there are almost 200 Islamic banks which are providing the Shariah compliant. We analyzed the strength of Islamic banks with the help of AID model. Our results have shown that Islamic banking is the milestone for the future Islamic banking. In this paper, we have taken GIB as the dependent variable and SC, IV, DV, ROA as the dependent variables. It has proved that there is positive association between them. Islamic banking is growing in the world at very fast pace. In the near future it will reach till 1300 billion. Persentably, across the 1200 Islamic banking are providing their services. In Pakistan, there is solid platform related to Islamic banking in Pakistan. In 2000 state bank was introduced the first Islamic bank.


Abdus Samad, 2004. Performance of interest-free Islamic banks vis-a-vis interestbased conventional banks of Bahrain. J. Econ. Manag., 12(2).

Ahasanul Haque, Jamil Osman, Ahmad Zaki Hj Ismail, 2009. Factor influences selection of Islamic banking: A study on Malaysian customer preferences. Am. J. Appl. Sci., 6(5), 922-928, ISSN, 1546-9239.

Al-Hawari, M., Ward, T., 2006. The effect of automated service quality on Australian banks’ financial performance and the mediating role of customer satisfaction, Market. Intel. Plan., 24(2), 127-147.

Arasli, H., Katircioglu, S.T., Smadi, S.M., 2005. A comparison of service quality in the banking industry: Some evidence from Turkish- and Greek- Speaking areas in Cyprus. Int. J. Bank. Market., 23(7), 508-526.

Bahia, k., Nantel, J., 2000. A reliable and valid measurement scale for the perceived service quality of banks. Int. J. Bank. Market., 4-91.

Delta Khoirunissa, 2003. Consumers preference toward Islamic banking (Case study in bank muamalat Indonesia and bank BNI syariah), Iqtisad. J. Islam. Econ., 4(2), Rajab 1424 H/September, 145 – 168.

Izah Mohd Tahir, Nor Mazlina Abu Bakar, 2007. Service quality gap and customers’ satisfactions of commercial banks in Malaysia. Int. Rev. Bus. Res. Paper., 3(4), October, 327-336.

Khan, M.S.N., Hassan, M.K., Shahid, A.I., 2008. Banking behavior of Islamic bank customer in Bangladesh. J. Islam. Econ. Bank. Finan., 159-194. Laurent Weill February 2009.

Leeds, B., 1992. Mystery shopping’ offers clues to quality service. Bank. Market., 24(11), 24-27.

Levesque, T., McDougall, H.G., 1996. Determinants of customer satisfaction in retail banking. Int. J. Bank. Market., 14(7), 12–20.

Mamun Rashid, Kabir Hassan, M., Abu Umar Faruq Ahmad, Quality perception of the customers towards domestic Islamic banks in Bangladesh. Article No. 5, 5(1).

Mamunur Rashid, Kabir Hassan, M., 2009. Customer demographics affecting bank selection criteria, preference, and market segmentation: Study on domestic Islamic banks in bangladesh. Int. J. Bus. Manag., 4(6).

Naser, K., Jamal, A., Al-Khatib, K., 1999. Islamic banking: a study of customer satisfaction and preferences in Jordan. Int. J. Bank. Market., 17(3), 135-150.

Rahmatina, A., Kasri, Salina, H.j., Kassim, 2007. J.KAU: Empirical determinants of saving in the Islamic banks: Evidence from Indonesia. Islam. Econ., 22(2), 3-23 (2009 A.D./1430 A.H.).

Yavas, U., Bigin, Z., Shenwell, D., 1997. Service quality in the banking sector in an emerging economy: a consumer survey. Int. J. Bank. Market., 15(6), 217–223.

Yousefi, M., Abizaden, S., McCormick, K., 1997. Monetary stability and interest-free banking: the case of Iran. Appl. Econ., 29(7), 869-876.



How to Cite

Najaf, K. ., & Ashraf, S. . (2016). Growth of Islamic banking in Pakistan. Scientific Journal of Pure and Applied Sciences, 5(3), 379-389. Retrieved from