Abstract
Archaeology from the ancient World shows that the conventional banking is evolved from usury based money lending(مہاجنی) business. It was imitated by the Jews in the 14th century in Italy but the Christen involved in it in 16th century. Due to a number of important innovations the size of this business has dramatically increased throughout the Globe and it occupied a very important place in modern busy and tidy life. Many severe financial crises faced by it provoked a debate to search out new alternatives. The Muslim community never welcomed this Raba based business and was in favour of its Islamization. Therefore, experiments on Interest-Free Banking were made throughout the Islamic World which lead to establish Islamic Banking. Now, these institutions are seen everywhere in the world. Pakistan Islamized the banking system in 1980s but the Supreme Court of Pakistan declared it un-Islamic in 1999 and called upon the government to Islamize the economy immediately. So, Islamic banking was re-started in 2002. Since then, it is spreading with more than 25% growth rate and has occupied more than 10% market share inspite of it is facing some important challenges i.e. competing parallel huge conventional banking, the deficiency of trained Islamic professionals, disharmony among Ulema regarding its operations/ products, deficiency of awareness about this industry etc. As these problems will be rectified a rapid growth of these Institution shall be achieved. Therefore, future of Islamic banking seems to be very bright in Pakistan. This research article comprises of a brief introduction of conventional banking, its types, products and services etc. It also include a brief introduction of Islamic Banking, its products and its importance. The article is concluded with its spreading aspects and future growth expectations in Pakistan.
Keyword(s)
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