Zarai Taraqiati Bank Limited (ZTBL) plans to convert its banking system from conventional to Islamic banking.
ZTBL’s Senior Executive Vice President Zahid Hussain told a national daily that the bank is in the process of conversion of branches into Islamic and this process will be carried out every year to transform the bank over the coming years. The process has already been initiated and 25 branches would be converted into Islamic by the end of this year, he added.
ZTBL has a network of 501 branches, 9 of which are Islamic. Apart from offering Islamic financing, the bank is also providing Hajj-related services to customers living in rural areas. The conversion of the bank was initiated after the approval of the bank’s Shariah board in line with the government announcement to implement the ruling of the Federal Shariat Court.
ZTBL provides farmers, particularly smaller farmers in rural areas, sustainable financial services, including the implementation of new schemes and the development of innovative products.
According to the bank’s annual report for the fiscal year 2022 (FY22), its asset base increased 93 percent in FY22 to reach Rs. 491 billion. Total deposits of the bank increased by 9 percent to Rs. 47.3 billion in FY22. The bank reported a profit after tax of Rs. 5.1 billion in FY22.
The bank’s asset quality indicators showed improvement as the gross infection ratio decreased to 31 percent in FY22 from 35 percent in the previous year. The non-performing loans fell to Rs. 33.68 billion in FY22 from Rs. 40.74 billion a year earlier.
Pakistan’s banking sector has witnessed a tremendous shift towards Islamic banking since last year. Faysal Bank successfully underwent the conversion to a fully-fledged Islamic bank earlier this year. It is now Pakistan’s second-largest Islamic bank.
Summit Bank has also announced that it would become an Islamic entity after a new UAE investor purchased a majority share in the bank. The Bank of Punjab is reportedly thinking about becoming an Islamic bank as well.
Source: Pro Pakistani