KARACHI: Faysal Bank has completed its transition to a complete Islamic bank after the State Bank of Pakistan (SBP) issued FBL an Islamic Banking License. In one fell-swoop, the license has made Faysal the second largest full-fledged Islamic Bank in Pakistan.
FBL, named after Mohammaed bin Faisal Al Saud, a Saudi Prince and businessman, started its operations in Pakistan back in 1987. Incorporated in 1994 as a public limited company, the bank continued to expand its footprint in Pakistan as a commercial bank.
In 2015 FBL announced its decision to convert itself into a full fledged Islamic bank. At the time it already had the second largest Islamic banking window in the country with 53 standalone branches. Faysal Bank currently has 639 branches that have all been converted to Islamic branches.
“Conversion of Faysal Bank is first of its kind in the banking history of Pakistan. This is a groundbreaking accomplishment, not only for the bank, but also for Pakistan’s Islamic banking industry,” said Governor SBP Jameel Ahmed.
On April 28, the Shariat Court announced a verdict in a long-pending, declaring the prevailing interest-based banking system as against the Shariah and directed the government to facilitate all loans under an interest-free system. The court had instructed the government to make laws within five years with regard to the implementation of Islamic banking within the country.
The court had ruled that the federal government and provincial governments must amend relevant laws and issued directives that the country’s banking system should be free of interest by December 2027. Faysal Bank’s conversion from a conventional bank to a full fledged Islamic bank adds pressure on other conventional banks in the country that have appealed the court’s decision.
