Islamic Banking Industry has flourished exquisitely and has been overwhelmingly received by businesses and corporations. According to State bank of Pakistan reports, Islamic Banking Industry (IBI) financing rose to Rs.1.035 trillion. IBI has attracted many businesses and they have adopted Islamic banking for seeking various means of finances to support their operations.
It has been reported that there are almost 21 institutions that are providing Islamic banking services as part of Islamic Banking Industry. Five of them are totally Islamic bank oriented while the remaining 16 are Islamic banking branches of conventional banks. The value of fully Islamic oriented banks sums up to Rs. 673billion while of others as Rs.362billion. IBI has also furnished financing worth of Rs.58billion to various businesses in its first quarter for the new fiscal year 2018.
Like the concept that prevails in conventional banking for the lending loan to customers, Islamic banking does not grant any loan rather it trades with customer according to shariah compliance laws to provide the required asset, either car, house, material or machine etc. The main sector which enormously attracted IBI is energy, infrastructure, automobile, Housing etc. The energy sector has the share of 12.9% in overall financing from IBI, while on the second number stood textile sector with 11.5%. Similarly, corporate sector made 71.3% of financing from IBI’s while Commodity financing ended up at 12.3% by September 2017.
