KARACHI: The State Bank of Pakistan (SBP) has reported that the overall assets and deposits of the Islamic banking industry have shown tremendous growth of 30 percent and 27.8 percent, respectively, during 2020.

“This is the highest increase in assets in a year since 2012 and in deposits since 2015. Over the last five years, both assets and deposits of the Islamic Banking Industry have more than doubled,” the SBP said in a press release.

The central bank has reported this in its quarterly report – Islamic Banking Bulletin for the quarter ending December 31, 2020. This growth in assets and deposits of the Islamic banking industry is encouraging, particularly due the fact that the industry was also faced with the Covid19 pandemic challenges during 2020.

“The assets of Islamic banking industry increased to Rs4269 billion, whereas deposits reached Rs3389 billion by end of December, 2020 that are 17.0 percent in assets and 18.3 percent in deposits of the overall banking industry,” read the report.

Financing of the Islamic banking industry has also grown by 16 percent during CY20. Further, non-performing finances (NPFs) to financing (gross) ratio has declined from 4.3 percent, as of end December 2019, to 3.2 percent as of end December 2020.

SBP is amongst the few regulators who have introduced a comprehensive legal, regulatory and Shariah governance framework for Islamic banking industry in the country.