State Bank of Pakistan (SBP) Deputy Governor Saleemullah has said that the government’s debt will become Sharia-compliant from January 1, 2028.
Speaking at an event in Karachi, Saleemullah said Pakistan has made significant progress towards Islamic banking over the past two to three years.
He said 29% of bank deposits are now held in Islamic banking, while Islamic banks account for 40% of the total financing provided by the banking sector.
He said the government has presented a roadmap for the period after 2027, under which government borrowing will be converted into a Sharia-compliant structure from January 1, 2028.
He added that, where possible, external financing will also be obtained through Sharia-compliant methods.
Saleemullah clarified that the government will continue repaying its existing conventional debt, but the rollover of conventional loans will be carried out through Sharia-compliant arrangements.
The SBP deputy governor said the government has developed a strategy to make its borrowing system Sharia-compliant.
He added that amendments to 40 laws will be completed within the stipulated transition period.
He said there is growing market demand for interest-free financial services and that, from January 1, 2028, domestic banks will provide services based on Sharia principles.
