The banking system in Pakistan is another legacy of the colonial era, which is often in direct conflict with the teaching of Islam. It is a matter of faith to change the prevailing financial system which is based on capitalism and exploitation. Various efforts have been made since the inception of Pakistan to introduce Islamic banking in the country and phase out the interest-based financial module. According to the latest statistics appearing in the media, the overallshare of bank deposits under the Islamic banking system has grown to 12.8 percent this year, thanks to the best efforts of the State Bank of Pakistan (SBP), which it is doing for the last over one decadefor the promotion and developmentof the Islamic banking in the country. The bank has achieved the cumulative average growth rate of over 50 percent during the last 12 years. At the moment, atleast two dozens banks are offering Islamic financing under the supervision of the Shariah Board of the State Bank.
The State Bank is also consulting various financial institutions in the Islamic world to get a cue for the promotion of Islamic banking in the country. However, every country has its own social and cultural environment and Pakistan needs to introduce a system based on justice and fair play, strictly in accordance with the injunctions of Islam. The current banking system has various anomalies and it is strictly based on the exploitation of the account holders. The methods of offering loans are also marred by anomalies as the large amounts of loans are offered to politically influential people who seldom care to return the money while the small loans recipients have to return the money with adequate markups. One of the biggest anomaly is one has to pay certain tax while depositing the money in other than the personal account. The Islamic banking means not only to safeguard the interests of the bank, but also of the account holders.
The present government had constituted a steering committee after coming to power in 2013 which took several initiatives for the promotion of Islamic banking, establishment of A separate Islamic Finance Department at Security and Exchange Commission of Pakistan. It is hoped that the share of Islamic banking will grow to 20 percent by the year 2020 and after which the Islamic banking will build a momentum to achieve faster growth. Though the SBP has developed a regulatory and supervisory framework to follow rulings of the Shariah Board, training of the workforce and structure of the system is also necessary.