Over 840 Islamic banks branches to be opened by 2012

KARACHI - Domestic banks in the country are expected to open more than 840 new branches throughout the country to carry out Islamic banking. At present the number of branches offering exclusively Islamic banking is 260. But by the year 2012 the total number of the Islamic bank branches would expand to over 1200.
This upcoming expansion in the Islamic banking in Pakistan had been mentioned in the Pakistan's Islamic Banking Sector Review 2003-2007.
The Future Outlook about the Islamic banking in Pakistan points out that the phenomenal expansion in the network of this sector is based on the factors like unmet demand, geographical coverage, product development, new segments and data collected by different Islamic banks.
It further estimated that total assets of Islamic banking industry would reach over one trillion rupees by the year 2012 while the deposits are expected to reach Rs.1 trillion. This in combination with the introduction of new sectors into the fold of Islamic banking
i.e. Islamic microfinance and agriculture services it is projected that Islamic banking industry will capture 12% share of total banking industry in year 2012. In addition to this, there will be a strong need of trained human resources in the field of Islamic banking. Based on the information collected, it is expected that within next 5 years expertise of over 15,000 people will be required to serve the Islamic banking industry.
The challenge for Islamic banks is to sustain the expected growth in a still-developing industry infrastructure environment and in an increasingly competitive banking industry.
In Pakistan the initiative to introduce Islamic Banking in Pakistan was launched back in 2001 when the government decided to promote Islamic banking in a gradual manner and as a parallel and compatible system that is in line with best international practices.
Meezan Bank Limited (MBL), which was granted a license on 31st January, 2002, commenced operations from March 20, 2002, as the first Islamic bank of the country. Since then the industry had been continuously showing impressive growth, surpassing the growth rates recorded by the conventional banks during the past five years.
Currently there are 6 full-fledged licensed Islamic banks (IBs) and 12 conventional banks have licenses to operate dedicated Islamic banking branches (IBBs). All of the five big banks in Pakistan are providing Islamic banking services. The total assets of the Islamic banking industry are over Rs. 225 billion as of 30th June, 2008 which accounts for a market share of 4.5% of total banking industry assets.
The market share of deposits stands at 4.2%. Total branch network of the industry comprises of more than 358 branches with presence in over 50 cities & towns covering all the four provinces of the country and AJK.
Globally the Islamic Financial Institutions (IFIs) together are likely to be now one trillion dollar industry with the setting up of over 250 IFIs that have managed to mobilise $400 billion and remaining from Islamic capital markets across over 60 countries including non-Muslim countries.