Pakistan’s Islamic finance dream: navigating through bumps and reaching goals.

TLDR:

• Pakistan has set a goal of becoming fully sharia-compliant in its banking services by December 2027, but the rate of adoption remains slow.
• The government is under pressure to transition to sharia-compliant financing after a directive from the Federal Shariat Court of Pakistan in 2022.

Despite regulatory pressure on banks to transition to sharia-compliant financing, the rate of adoption is proving slow. Pakistan has set a goal of becoming fully sharia-compliant in its banking services by December 2027, but still has a long way to go to create a banking sector that provides the services its customers want. Change is being driven by a Federal Shariat Court of Pakistan directive in 2022 for the government to adopt sharia-compliant forms of finance, both domestically and internationally, by the end of 2027.