FUTURE STRATEGIC MOVEMENTS FOR THE DEVELOPMENT OF ISLAMIC BANKING SYSTEM IN PAKISTAN

Abstract

Purpose: Islamic banking system is a recent structure of banking as compared to conventional banking which is operating more than a century. Due to its significant growth in assets has proved its existence not only in Muslim countries but also in non Muslim countries by opening full fledge Islamic banks and its windows to enter in the competitive banking sector. The purpose of this study is to analyze the current situation regarding strengths and weaknesses of the Islamic banking system in Pakistan and take further step to enhance its structure worldwide and explore new strategic direction for the development of this banking system in Pakistan. Methodology: Due to its consistent growth in assets and steadily risen in market share it is necessary to assess the Islamic banking procedures and its structure and take a step to improve by long term beneficial strategies. As Strategic planning is a long term planning that is always beneficial for any organization to attain its goals. This kind of banking system can survive in the environment if it maintains its distinguishing feature those are useful for the banking industry and come with the new strategies and ideas. Internal factor evaluation and external factor evaluation are included in the first part those found through Islamic banking survey and the second part includes the new futuristic strategies for the development of EB system in Pakistan. Results / Findings: The results those come out through this research paper are related to SWOT Analysis includes a lot of factors some are favorable and other unfavorable for the Islamic banking industry. As Pakistan is a Muslim country has a vast population of Muslims so it’s a competitive advantage for this country to grab the public intention through new strategic plans. Whereas there are a lot of factors those are affecting badly to the economic condition of EBIs like inefficient organizational structure, in effective guidelines and standardization system, lack of proper knowledge of Islamic banking products, less promotional activities and so on. Implications: The results of the research will be helpful for the Islamic banking sector in better understanding of their performance and the industry can use this research to recognize and resolve the challenges. This also includes different strategic plans for the growth of Islamic banking system in Pakistan.