Pakistan, one of the largest Muslim-majority nations in the world, has yet to establish a fully operational Islamic Digital Banking. Despite the growing demand for Shariah-compliant banking solutions, the country remains shockingly behind in the race to lead the global Islamic fintech market. While countries like Malaysia, Indonesia, and the UAE have successfully launched digital banks that align with Islamic financial principles, Pakistan has failed to get even a single fully digital Islamic bank off the ground.
The demand is massive. Over 77% of Pakistan’s banking customers prefer Shariah-compliant financial products, yet the options available remain limited. The five digital banking licenses issued by SBP included Raqami Islamic Digital Bank, which was expected to pioneer this space. However, as of 2025, no major progress has been seen, raising concerns about whether these digital banks were ever equipped to handle such a task.
There is a fundamental difference between an Islamic bank’s mobile app and a fully digital Islamic bank—a difference that seems to be lost. Most Islamic banks in Pakistan have mobile apps, but these merely serve as extensions of traditional banking services rather than fully digital banking ecosystems. None of the existing Islamic banking apps allow for full account opening online, nor do they provide an entirely digital end-to-end experience. Instead, customers must still visit physical branches for verification, documentation, and onboarding, defeating the very purpose of digital banking.
Another significant challenge has been the lack of technological readiness. Establishing an Islamic digital bank requires a strong backend that can manage profit-and-loss-sharing models, zakat deductions, and interest-free financing solutions. Yet, most of Pakistan’s digital banking license holders have struggled with even basic technological infrastructure.
Investor confidence in this sector has taken a massive hit. Initial enthusiasm for fintech in Pakistan was strong, however, the continued delays, lack of concrete action, and absence of a clear roadmap have driven many investors away. The failure of Islamic digital banking to materialize is not just a missed opportunity—it is a serious setback for Pakistan’s aspirations to be a global leader in Islamic finance.
At the same time, conventional digital banking models like Easypaisa, JazzCash, and Nayapay have continued to grow, despite lacking Shariah compliance. This raises an important question: Are we even committed to Islamic digital banking, or has it simply become a talking point with no real execution?
Unless drastic action is taken soon, digital banking in Pakistan will go down as one of the biggest financial
policy failures in recent history.
