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You are here: Home / Archive / Islamic banking on the rise in Pakistan

Islamic banking on the rise in Pakistan

May 1, 2011 by Richard Cimino

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Deposits in Pakistan’s Islamic banks rose from $3 billion to $4 billion last year, reports Pamela Constable (Washington Post, April 30).

According to business experts, the trend is a consequence both of turmoil in the Western financial systems in recent years and of a surge in religious feelings. Not only banks, but also all kinds of products deemed to be halal (i.e. permissible according to Islamic law) benefit from this religious mood. Several Western banks also offer “sharia-compliant services” in Pakistan. But there are also non-religious reasons for choosing Islamic financing, for instance, reduced financial risk.

The principle of risk sharing is at the core of the system.Despite such trust in the supposed security of Islamic finance, it is not immune to problems encountered by other types of firms. From this angle, 2009 had been a critical year in the Gulf, the cradle of the industry, according to an analysis published a few months ago by Asharq Al-Awsat (Sept. 6).

It makes clear that adequate supervision had been lacking in some cases, leading some executives to regard Islamic finance “as nothing more than a means of marketing”—although the system itself was not the cause of the problems. The prospects for the growth of Islamic finance and ethical financial products in general remain strong, but risks inevitably go along with a rapidly growing industry.

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Filed Under: Archive

Also in this issue

  • On/File: May/June 2011
  • Findings & Footnotes: May/June 2011
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  • Greece’s financial crisis hits the Orthodox Church
  • Europe’s prison chaplaincies cooperating in multicultural societies
  • Disputed numbers and outcomes for faith-based organizations in the developing world
  • Current Research: May/June 2011
  • Christian rappers’ Calvinist edge
  • University chapels as interfaith laboratories?
  • Extremist Islam targets alienated youth in U.S. for ‘lone wolf’ terrorism
  • Anti-circumcision movement gaining momentum
  • Gay rights in the Presbyterian church—another domino or the end of a trend?
  • Rev. Moon rekindles millennial expectations

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