Al Baraka eyes Pakistan for islamic banking expansion

May 13, 2024 (MLN): Bahrain-based Al Baraka Bank is looking to deepen its footprint in Pakistan as the South Asian nation embraces interest-free Islamic banking, as Bloomberg reported.

The bank will open 15 new branches across Pakistan as a first step, Muhammad Atif Hanif, the bank’s chief executive officer in Pakistan, said in an interview.

“This is just first year and we expect a lot more strong expansion in years to come,” he said.

Islamic banking, based on Sharia law, does not offer interest but rather profit sharing as a return on investment.

The system has been growing in Pakistan since the Federal Shariat Court ruled in 2022 against interest-based banking in favor of an “equitable, asset-based, risk-sharing and interest-free” economy by December 2027.

Islamic banking has 23% of overall deposit share of the banking industry, according to the State Bank of Pakistan.

Under its five-year plan, Al Baraka is creating links between Pakistan and the bank’s existing ties to non-traditional markets in the Persian Gulf and Africa.

“They will get new markets and we, business. Even those aren’t our clients will try to grab the opportunity,” Hanif said.

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