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JS Bank Limited (JSBL) has announced plans to launch an Islamic banking window as part of Pakistan’s broader move toward a fully Sharia-compliant banking system by January 2028, according to a news report.
The bank’s Chief Operating Officer (COO), Atif Salim Malik, confirmed that a proposal has been submitted to the State Bank of Pakistan (SBP) for approval.
“We aim for a gradual transition to Islamic banking, which aligns with the SBP’s Vision 2028 and government directives under the recently passed 26th constitutional amendment to eliminate interest-based banking,” Malik said.
JSBL’s acquisition of BankIslami in 2023 has strengthened its position in the Islamic finance sector, bringing its combined network to over 800 branches. Malik noted challenges in aligning international creditors with Islamic financing but emphasized the bank’s readiness for the transition.
JSBL has prioritized lending to small and medium enterprises (SMEs) and agriculture, with 17% of its total exposure dedicated to this sector, surpassing the industry average of 4%. Malik highlighted efforts to address challenges in SME financing through innovative approaches, including a Pakistan Banks’ Association survey aimed at integrating undocumented businesses.
The bank is also focusing on renewable energy financing, signing on to the Green Climate Fund to promote solar energy projects.
JSBL has made strides in digital banking with its “Zindigi” brand, which has attracted over five million accounts in just 2.5 years. More than 80% of its customers now use at least one digital platform, including WhatsApp banking and internet services.
Malik predicts falling interest rates will boost consumer financing, particularly for auto and housing loans, but could slow deposit mobilization. The government’s recent tax adjustments, including an increase in the standard income tax rate for banks to 44%, pose additional challenges.
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Photo taken on May 19, 2021 shows Karachi Nuclear Power Plant Unit-2 K-2 in southern Pakistani port city of Karachi. Speaking virtually at the inauguration ceremony of the Karachi Nuclear Power Plant Unit-2 K-2, Pakistani Prime Minister Imran Khan said that Friday marks the 70th anniversary of the establishment of diplomatic relations between the two countries, and apart from the ever-strengthening bilateral ties, the people-to-people contacts have also become deep-rooted with the passage of time. (Photo by Str/Xinhua via Getty Images)
