Pakistan fails to meet target of 50% Shariah-compliant banking by Jan. 2025 — data

Special Pakistan fails to meet target of 50% Shariah-compliant banking by Jan. 2025 — data
People wait to use an ATM bank machine in Rawalpindi on June 9, 2023. (AFP/File)
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Updated 16 April 2025
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Pakistan fails to meet target of 50% Shariah-compliant banking by Jan. 2025 — data

Pakistan fails to meet target of 50% Shariah-compliant banking by Jan. 2025 — data
  • Pakistan’s central bank set a target to increase Islamic banking deposits’ share to 50% by January 2025
  • Pakistan increased market share of Shariah-compliant banking deposits to only 24.9% by December

KARACHI: Pakistan’s government failed to achieve a target set by the central bank to increase the share of Islamic banking deposits in the country by 50% by January this year, according to official documents seen by Arab News, as Islamabad attempts to rid the country’s banking system of interest. 

Pakistan’s Federal Shariat Court (FSC) directed the government in April 2022 to eliminate interest by 2027, maintaining that Islam prohibited it in all its forms and manifestations. The FSC determines whether Pakistani laws comply with Islamic law or not. 

Following the order, the government and State Bank of Pakistan (SBP) have taken measures ranging from changing laws in October 2024 to issuing Sukuk (Islamic bonds) to replace interest-based treasury bills and investment bonds.

According to a presentation shared by the SBP with bankers in August 2024, a copy of which Arab News has seen, the central bank set an “indicative target” for the government to increase the share of Islamic banking deposits to 50% by January 2025, 65% by January 2026, 80% by January 2027 and 100% by December 2027. 

Pakistan, however, missed this target and was able to increase the market share of its Shariah-compliant banking deposits to only 24.9% by December 2024, the document stated. Noor Ahmed, the chief spokesperson of the SBP, did not respond to Arab News’ request for comments. 

“The SBP and the Securities and Exchange Commission of Pakistan are making a lot of efforts but the government should do more to speed up this process of conversion,” Ahmed Ali Siddiqui, the head of Shariah-compliance at Meezan Bank Ltd., told Arab News.

Meezan Bank is Pakistan’s largest Islamic bank which operates more than 1,000 branches in over 300 cities across the country. Pakistan has six full-fledged Islamic banks and 16 conventional banks that also offer Islamic products. 

INTEREST-FREE BANKING ON THE RISE

The demand for interest-free banking, however, is increasing in the country. 

This increasing demand is reflected in the over 20% growth of annual deposits that Islamic banks have been reporting in recent years, with their total assets swelling beyond Rs10 trillion ($35.6 billion) for the first time, said the SBP’s Quarterly Islamic Banking Bulletin from October to December 2024. 

Total deposits of Islamic banks grew by 17% to Rs 7.91 trillion ($28.2 billion), which accounts for 25% of the total banking industry, the bulletin said. Islamic banks extended Rs 4.04 trillion ($14.4 billion) of financing to borrowers, while their investments totaled Rs 4.99 trillion ($17.8 billion).

“The steady rise in assets, deposits, financing, and investment highlights the sector’s resilience,” the central bank said in the report.

Both conventional and Islamic banks are expanding their branches across Pakistan. This led to a 21% year-on-year growth in the number of branches of Islamic banks to 6,017 and a 17% hike in conventional banks operating Islamic banking windows to 2,253.

“This expansion underpins the increasing accessibility and demand for Islamic banking services across the country,” the SBP said in the bulletin.

Pakistan’s leading banks are converting their branches into Shariah-compliant to align with the legal requirement for all banks to transition to Islamic banking by 2027.

In November, MCB Bank Ltd. converted 39 of its conventional branches into interest-free ones while the United Bank Ltd. has also converted all its branches located in the northwestern Khyber Pakhtunkhwa and southwest Balochistan provinces into interest-free ones.

“The government’s biggest challenge is to convert all its loans and financing into Islamic financing,” Siddiqui said. 

He urged the government to take all its deposits to Islamic banks and convert its treasury bills and investment bonds into Sukuk as a first step.

“You should at least announce the conversion of National Bank Pakistan [into a Shariah-compliant bank], which is the state-owned bank,” Siddiqui said. 

The banker said the government could speed up the process of conversion if all its institutions could carry out their transactions such as salaries and pension funds through Islamic banking. 


Turkiye detains 13 people in probe of fintech Papara, which acquired Pakistan’s SadaPay

Turkiye detains 13 people in probe of fintech Papara, which acquired Pakistan’s SadaPay
Updated 27 May 2025
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Turkiye detains 13 people in probe of fintech Papara, which acquired Pakistan’s SadaPay

Turkiye detains 13 people in probe of fintech Papara, which acquired Pakistan’s SadaPay
  • Papara is suspected of money laundering, illegal betting and establishing a criminal organization
  • Papara expanded by acquiring Pakistan-based SadaPay and Spain-based Rebellion Pay in 2023

ISTANBUL: Turkish authorities detained 13 people as part of an investigation into fintech company Papara over suspected money laundering, illegal betting and establishing a criminal organization, Interior Minister Ali Yerlikaya said on Tuesday.

Yerlikaya said authorities determined that the company, which provides online money transfers, foreign-exchange transactions and bill-payment services for its 21 million users, was allowing users to open accounts to transfer illegal betting income.

A report by state broadcaster TRT Haber said the detentions included Papara’s founder and chairman, Ahmet Faruk Karsli.

As part of the probe, the Savings Deposit Insurance Fund (TMSF) was appointed as a trustee to Papara by a court decision, following reports from the central bank, the Financial Crimes Investigation Board (MASAK), and other relevant institutions.

The central bank, which regulates payment firms, said on Tuesday it would implement daily limits to transactions made on the platform.

“In this process, which will be carried out in coordination with the relevant institutions, temporary daily limits will be applied to payment transactions at the institution,” the central bank said in a statement.

It also sought to reassure users, noting that “within the scope of the law, the funds of payment service users in payment and electronic money institutions are secured in protection accounts at banks.”

Yerlikaya said 10 companies, bank accounts and assets of the detained individuals were seized as part of the investigation.

A report by the financial crimes unit found that more than 26,000 accounts were used for illegal online betting, involving transactions worth 12.9 billion lira ($330 million), he added.

Papara, one of Turkiye’s fastest-growing fintech companies, did not immediately respond to a request for comment.

The company was founded in 2015 and received an electronic money institution license from the banking regulator BDDK the following year. It expanded abroad by acquiring Pakistan-based SadaPay and Spain-based Rebellion Pay in 2023.

According to its website, Papara had 21 million users as of last year. PPR Holding owns Papara, and Trade Registry data shows Karsli held about 90 percent of the company as of May 2024.


Pakistan to celebrate Eid Al-Adha on June 7

Pakistan to celebrate Eid Al-Adha on June 7
Updated 27 May 2025
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Pakistan to celebrate Eid Al-Adha on June 7

Pakistan to celebrate Eid Al-Adha on June 7
  • Eid Al-Adha is observed on 10th day of Dhul Hijjah
  • Annual Hajj pilgrimage will commence on June 4

ISLAMABAD: Pakistan’s moon sighting committee announced today, Tuesday, that the crescent marking the beginning of the Islamic month of Dhul Hijjah was not sighted due to unclear skies and the Eid Al-Adha festival would commence from June 7. 

Dhul Hijjah is the twelfth and final month of the Islamic calendar, a sacred period during which the Hajj pilgrimage and Eid Al-Adha, the Festival of Sacrifice, take place. It is one of the four holy months in Islam, with the first 10 days especially revered and considered among the best days of the year for performing righteous deeds.

“Today, in Pakistan, most areas experienced cloudy weather, and some areas had clear skies. The confirmation of sighting of the Dhul Hijjah moon has not been received from any part of Pakistan,” Ruet-e-Hilal Committee Chairman Maulana Abdul Khabeer Azad said at a press conference.

“Hence unanimously [we have] decided that the first Dhul Hijjah, 1446 AH will be observed on Thursday, May 29 and Eid Al-Adha will be on Saturday, June 7, 2025.”

Commemorating the willingness of Prophet Ibrahim to sacrifice his son on God’s command, Muslims mark the Eid Al-Adha holiday by slaughtering animals such as sheep, cows and goats. The meat is shared among family and friends and also donated to the poor.

Eid Al-Adha is observed on the 10th day of Dhul Hijjah, while the annual Hajj pilgrimage will commence on June 4.


Pakistani PM meets Azerbaijan’s Aliyev, thanks him for support during India standoff

Pakistani PM meets Azerbaijan’s Aliyev, thanks him for support during India standoff
Updated 27 May 2025
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Pakistani PM meets Azerbaijan’s Aliyev, thanks him for support during India standoff

Pakistani PM meets Azerbaijan’s Aliyev, thanks him for support during India standoff
  • PM Sharif will attend a trilateral summit with Aliyev and Türkish President Erdogan in Lachin
  • Sharif is on regional diplomacy tour following Pakistan’s recent military confrontation with India 

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif on Tuesday met the president of Azerbaijan, Ilham Aliyev, and thanked his country for its “steadfast support” during a recent military standoff with India, the worst conflict in decades between the nuclear-armed neighbors in decades. 

Sharif is in Azerbaijan on the third stopover of a five-day regional diplomacy tour that also saw him visit Iran and Turkiye. Turkiye and Azerbaijan had openly pledged support for Pakistan during the standoff with India while Iran had urged restraint multiple times and also offered to mediate.

The four-day military escalation saw Pakistan and India launch missiles and drones deep into each other’s territories and exchange gunfire on their de facto border, the Line of Control, until a ceasefire was announced on May 10. Nearly 70 people combined were killed on both sides of the border. 

“The prime minister thanked Azerbaijan for its steadfast support during the recent Pakistan-India confrontation, in the face of Indian provocation and acknowledged the public expressions of solidarity from both the leadership and the people of brotherly Azerbaijan,” Sharif’s office said in a statement. 

“He said that people of Azerbaijan celebrated the success of Pakistan.”

During the meeting, which took place on the eve of a trilateral summit between Pakistan, Azerbaijan and Türkiye, Sharif and Aliyev reviewed bilateral relations and expressed satisfaction on the trajectory of political, economic, defense, and cultural cooperation.

“They reaffirmed their shared commitment to diversifying the strategic partnership through investment in mutually beneficial avenues,” the prime minister’s office said. 

“Azerbaijan side agreed to exchange of delegations with regard to progress in investment of Azerbaijan in Pakistan. In this regard delegation level talks will be organized very soon.”

Pakistan and Azerbaijan have strengthened ties in recent years through defense and energy cooperation and Baku has supported Islamabad’s position on the Kashmir dispute at international forums.

Islamabad has also offered Azerbaijan access to its seaports to facilitate trade with global markets and promoted regional connectivity initiatives linking Central Asia to South Asia.

At the start of his regional visit, Sharif met Turkish President Tayyip Erdogan in Türkiye and thanked him for Ankara’s strong backing during the conflict with India. The two leaders also discussed expanding cooperation in defense production, energy, IT, agriculture and infrastructure and agreed to pursue a bilateral trade target of $5 billion, building on commitments made during the 7th High-Level Strategic Cooperation Council held in Islamabad earlier this year.

Sharif also visited Tehran, where he held meetings with President Masoud Pezeshkian and Supreme Leader Ayatollah Ali Khamenei. 

At a joint press stakeout with the Iranian president, Sharif made a peace offer to India, saying Pakistan was ready for talks on contentious issues including Kashmir, water-sharing and countering terrorism.


Andersen Consulting expands into Pakistan with collaborating Firm NEC Consulting

Andersen Consulting expands into Pakistan with collaborating Firm NEC Consulting
Updated 27 May 2025
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Andersen Consulting expands into Pakistan with collaborating Firm NEC Consulting

Andersen Consulting expands into Pakistan with collaborating Firm NEC Consulting
  • NEC Consultants is an environmental and infrastructure consulting firm based in Pakistan
  • Andersen provides services spanning corporate strategy, business, IT, AI transformation

SAN FRANCISCO: Andersen Consulting bolsters its sustainability offering through a Collaboration Agreement with NEC Consultants (Pvt) Ltd., an environmental and infrastructure consulting firm based in Pakistan.

Established in 2006, NEC Consultants provides environmental and engineering professional services. Their offerings include environmental assessments and audits, wastewater treatment plant design, energy audits, sustainability and circularity consulting, and training in environmental and energy efficiency.

Azher Uddin Khan, managing director of NEC Consulting, said:

“This collaboration with Andersen Consulting marks a significant milestone in our journey to provide innovative and sustainable solutions. By combining our local expertise with the organization’s global reach, we are poised to address complex challenges and drive impactful change in Pakistan and beyond.”

Mark L. Vorsatz, global chairman and CEO of Andersen, added:

“Pakistan is a rapidly growing economy with enormous potential in infrastructure development and environmental sustainability. As the country continues to invest in large-scale public and private projects, the need for multidimensional services is greater than ever. By collaborating with NEC Consultants, we gain a competitive edge in a high-growth market.”

Andersen Consulting is a global consulting practice providing a comprehensive suite of services spanning corporate strategy, business, technology, and AI transformation, as well as human capital solutions. Andersen Consulting integrates with the multidimensional service model of Andersen Global, delivering world-class consulting, tax, legal, valuation, global mobility, and advisory expertise on a global platform with more than 20,000 professionals worldwide and a presence in over 500 locations through its member firms and collaborating firms. 

Andersen Consulting Holdings LP is a limited partnership and provides consulting solutions through its member firms and collaborating firms around the world.


Pakistan’s largest port operator issues monsoon safety measures

Pakistan’s largest port operator issues monsoon safety measures
Updated 27 May 2025
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Pakistan’s largest port operator issues monsoon safety measures

Pakistan’s largest port operator issues monsoon safety measures
  • Upcoming monsoon season is expected to begin earlier than usual and bring heavier rainfall, disaster authority says 
  • Pakistan is one of the most vulnerable nations to climate change, floods in 2022 killed more than 1,700 Pakistanis

ISLAMABAD: Pakistan’s largest port operator, the Karachi Port Trust (KPT), on Tuesday issued a list of precautions to be taken in case of heavy rains, winds and flooding during the upcoming monsoon season, including monitoring the safety of ships and boats and securing dredges, barges and cargo.

The upcoming monsoon season is expected to begin earlier than usual and bring heavier rainfall, the National Disaster Management Authority (NDMA) said last week. The season is likely to begin around June 26–27, roughly three to four days ahead of its typical onset. Rainfall across the country is likely to exceed normal levels by up to 5 percent, with northeastern Punjab bracing for a 50 percent increase.

“Monitor the safety of ships at berths closely and assess their security and ensure mooring lines are properly set,” the KPT said in an advisory. 

“Pilots should be on standby to cast off vessels to sea in heavy weather. Tugs, pilot boats, and shipping boats must be ready for emergencies.”

Small boats should be parked in less exposed locations and properly secured and dredgers and barges must also be well secured, with doubled-up mooring ropes and manned appropriately, KPT said. 

All cargo such as vehicles, appliances, sensitive and lightweight goods, should be secured and covered with tarpaulin. 

“Ensure technical staff is available 24/7 for support. Medical team and ambulance must be on standby,” the advisory added. 

“Roofs should be maintained to prevent leakages and seepage. High winds and lightning can damage power lines and transformers; maintenance of electrical items is necessary.”

KPT also recommended the availability of standby generators and backup power on short notice during heavy rain.

Pakistan is one of the most vulnerable nations to climate change. In 2022, devastating floods blamed on climate change killed more than 1,700 Pakistanis, affected another 33 million and caused the country over $30 billion in economic losses.