With 67% of Pakistan’s adult population now financially included, up from just 47% in 2018, the country’s banking landscape is transforming at a remarkable pace. But financial inclusion alone does not complete the picture. Increasingly, Pakistanis are demanding ethical, accessible, and tech-forward banking solutions, and nowhere is this convergence more visible than in the rise of Islamic digital finance.
The momentum from the first to the second quarter of 2025 underscores the sector’s resilience and steady deepening. During this period, assets expanded by 7 percent and deposits by 13 percent, while net investments rose 9.4 percent—driven largely by strong Sukuk subscriptions. This pace of growth, outstripping most conventional segments, suggests that faith-aligned banking is no longer a niche pursuit but a mainstream financial choice. Even with financing largely stable at PKR 4 trillion, these indicators reflect how liquidity, investment appetite, and institutional outreach continue to strengthen quarter after quarter.
The State Bank’s Vision 2028, aligned with the Federal Shariat Court’s directive, continues to guide Pakistan’s phased transition toward a fully Shariah-compliant banking system by the end of 2027. If realised, this would place Pakistan among the few nations moving toward a majority Islamic banking structure transforming not just compliance but also the country’s entire financial ethos.
This policy alignment has created space for forward-looking institutions to design models that are both compliant and digitally future-ready. Among them, Mashreq stands out for entering Pakistan with a clear vision – to lead the next era of Islamic digital banking. With over five decades of global experience and deep digital expertise, the bank brings tested innovation and governance strength to a market poised for transformation. At the forefront of this effort is Shahzad Khokhar, SEVP & Head of Islamic Banking at Mashreq Pakistan.
“Pakistan is at an inflection point, where the growth of Islamic finance meets the power of digital disruption,” says Shahzad. “Yet, the industry’s full potential remains constrained by legacy, brick-and-mortar operating models that cannot scale at the pace customers expect. Traditional account opening journeys often require multiple physical touchpoints, making it neither seamless nor convenient for customers to switch banks, even when better options exist. A lack of real-time transparency into account activity continues to frustrate users who increasingly expect instant access, clarity, and control over their financial lives.”
Mashreq is committed to removing these barriers through a digital-first, fully compliant Islamic banking experience designed around simplicity, speed, and trust. By offering secure onboarding, intuitive interfaces, and always-on visibility into accounts and transactions, we aim to give customers the confidence and convenience they deserve.
We see an opportunity to merge ethical financial principles with intuitive, tech-enabled platforms that not only serve – but uplift – communities driving the next chapter of growth for Islamic Banking.
We are here to redefine what Digital Islamic Banking can be: transparent, scalable, and truly built for the future.
Why Mashreq Chose Pakistan
Pakistan’s appeal lies in its digital and demographic dynamism. A young population – approximately 67% under the age of 30 and nationwide mobile teledensity approaching 79.38% as of August 2025 set the stage for a banking revolution. The ecosystem is primed for digital first.
Billing data reinforces the point: in FY24, mobile- and internet-banking transactions reached 1.346 billion (up ~62% YoY), with values rising ~74% to PKR 70 trillion. Further, as of Q3-FY25, retail payments across the banking system reached approximately 2.41 billion transactions, worth PKR 164 trillion, with a digital-transaction share of 89%.
Branchless banking continues to scale: in FY24, branchless banking platforms processed 2.697 billion transactions, while EMI-issued e-wallets recorded 85 million transactions, reflecting 85 percent year-on-year growth, according to the State Bank of Pakistan’s Annual Payment Systems Review FY24
“This is a market ready for innovation,” explains Shahzad. “For a financial system long dominated by conventional institutions, the readiness we see today marks a generational shift in both trust and expectation. The government’s push for digital inclusion, combined with the public’s trust in Islamic banking, makes Pakistan a natural choice for Mashreq’s unique offerings that combine convenience, ethics & impact, and reliability.”
Overcoming Challenges with Innovation
One of the most significant challenges is financial-literacy readiness, which stood at just 19% by end-2022. This indicates that while more people are opening accounts, a sizeable portion of the population still lacks confidence or understanding to use formal financial services effectively.
“Our platforms are designed to be intuitive and inclusive enabling anyone with a smartphone to open a bank account,” says Shahzad. “Every product we introduce is rigorously vetted for Shariah compliance because trust is everything in Islamic finance, and our goal is to build that trust digitally.”
Mashreq’s Vision for Value Creation and Inclusive Growth
Mashreq’s entry into Pakistan isn’t just about market expansion, it also reflects the bank’s global strategy of using technology as a force for empowerment. Shahzad emphasises that Mashreq’s approach centres on financial well-being, including underserved groups that include women, youth, and SMEs.
“We are investing in simplified onboarding journeys, making everyday banking transactions seamless, and value creation for customers through offering hybrid products offering both transactional and savings benefit in one and market-highest profit yielding Islamic Savings accounts. Our goal is to ensure that we give value back to our clients and no one is excluded from banking.”
Importantly, the country’s highest level leadership’s and SBP’s recognition of Mashreq throughout its journey from being selecting among only five digital-bank licences (from around 20 applicants), granting it the first pilot licence and then supporting its official commercial launch in September 2025 – further underscores the bank’s credibility and alignment with Pakistan’s economic and regulatory vision.
A Vision for the Future
Looking ahead, Shahzad envisions a future where Islamic digital banking is not a niche—but the national standard.
“We’re not here to compete for short-term market share. We’re here to spark a movement—where digital infrastructure, Islamic principles and customer-centric design converge to reshape finance for the better.”
As Pakistan advances toward its NFIS target of 75% financial inclusion by 2028, while striving to reduce the gender gap to 25%, Mashreq is poised to play a central role in accelerating this progress. With global expertise, cutting-edge technology and deep respect for local values, the bank is helping Pakistan reimagine its financial future.
