ISLAMABAD: The Islamic Banking Industry (IBI) has reached new peaks during CY21 as its assets surpassed the 5 trillion mark to reach Rs5,577 billion with the highest ever increase of Rs1,308 billion, whereas deposits reached at Rs4,211 billion with an increase of Rs822 billion.
According to details, State Bank of Pakistan (SBP) reported this today (Friday) in its Islamic Banking Bulletin for the quarter ending December 2021. According to SBP report, assets of IBI grew by 30.6 percent in CY21, while deposits increased by 24.2 percent during the same period.
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As a result of this strong growth, the market share of Islamic banking assets and deposits in the overall banking industry increased to 18.6 percent and 19.4 percent, respectively, by end Dec 2021.
The increase in assets of IBI was driven by both financing to the private and public sector and investments in Shariah compliant securities.
Financing by the IBI recorded a rise of Rs716 billion (38.1 percent) during CY21, which is also the highest ever increase during a year. Further, investments of IBI witnessed a growth of Rs591 billion (46.9 percent) during CY21 on the back of domestic sovereign Sukuk issued by the Government of Pakistan.
On funding side, current deposits and saving deposits of IBI witnessed significant increase of Rs441 billion and Rs277 billion respectively during CY21.
The growth in deposits are also owed to the fact that, during CY21, the availability of Islamic banking services increased in the country with the addition of 500 new Islamic banking branches.
The total number of branches now stand at 3,956 across 125 districts, which is around 25 percent of the total number of commercial banks’ branches in the country.
It would be pertinent to mention here that IBI has been playing a significant role in the implementation of various measures taken in the wake of Covid19 pandemic and several other key initiatives to promote financing for low cost housing and SMEs and digitization.
During the Covid19 pandemic, SBP introduced Temporary Economic Refinance Facility (TERF) – a concessionary refinance facility aimed at promoting investment both new and expansion and/or Balancing, Modernization and Replacement (BMR) that has been highly appreciated by the business community.
In the disbursement of financing under TERF, the IBI also contributed significantly with a sizable share of 38 percent in total amount disbursed.
Similarly, under the flagship initiative of Mera Pakistan Mera Ghar, a financing facility to promote affordable housing, the share of IBI has been 49 percent in total disbursements and 58 percent in total approved amount of financing.
