International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Growth of Islamic Banking in Pakistan by Using AID Model
Dr. Muhammad Ramzan, Ms. Ayesha Zahid, Nadir Hussain, Kashif Islam, Faisal Aziz, Sardar Khan Ghazenfer

Islamic Banking (IB) is flourishing dynamically in Pakistan like all other Muslim and non-Muslim countries since January, 1981 as a result of Islamization of banking sector by introducing radical and structural developments made by the Government. Financial stability has always been a great conventional concern for the banking authorities all over the world. Same is the case with IB. Due to strong demands/requirements for Shariah Compliance products and services, the Islamic banks and financial institutions are increasing in numbers at a much faster pace in comparison with conventional banks, especially in the Islamic countries in the last 30 years or so. Now, there are about 200 Islamic banks providing Shariah Compliant Banking in more than 70 nations, these include not only in Islamic countries but also in western countries. The strength and financial health of the Islamic banks of Pakistan was analyzed by using “AID model” (Assets, Investments and Deposits). Moreover, some qualitative factors were also given due weight like perception/expectations of customers, businessmen & entrepreneurs to fulfill their modern professional needs. The data of all the Islamic banks working in Pakistan was gathered and analyzed in order to prove quantitatively through AID model that Islamic banks have shown a remarkable growth as a milestone for future Islamic banking. As no doubt, future lies in IB.

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