Islamic Banks are Better than Commercial Banks at Financing, Report

Newstoay: Pakistani Full-fledged Islamic banks have surpassed conventional banks in funding the private sector, rising to Rs. 94.8 billion from July to May of the current fiscal year 2022-23 (11MFY23), but still 54.8 percent lower than Rs. 209.8 billion last year. According to the (SBP), Islamic banks lent Rs. 94.8 billion to the private sector, a significant difference of Rs. 63.8 billion from conventional banks, which lent Rs. 30.9 billion in the first eleven months of the current fiscal year. Meanwhile, total banking credit to the private sector has dropped by 98 percent this fiscal year to Rs. 27.9 billion, down from Rs. 1.41 trillion in 11MFY22. The Islamic division also reported the retirement of a recent financial amount which is of Rs 97.9 billion in a given period.

The Islamic bank includes Faysal Bank, the topmost Meezan Bank, MCB, Bank Al Baraka, and Dubai Islamic Bank. Private or commercial banks are opting for Islamic banks for finance purposes. On the other hand, Islamic banks are providing interest-free loans for houses and automobiles things. Islamic banks are preferable as compared to Commercial banks. The government will also order in the coming years the full-fledged interest-free economic system in the country. The government is working on an Islamic system for their finance. Moreover, Meezan bank is offering used cars for customers on a low price and a monthly installment which is totally interest-free.