The Bank of Khyber (BoK) has initiated the process of converting from a conventional bank to a fully Islamic financial institution, according to an official notification sent to the Pakistan Stock Exchange (PSX) on Thursday.
In a letter addressed to the PSX, BoK formally announced the transition in compliance with Section 96 of the Securities Act, 2015, and Clause 5.6.1(a) of the PSX Rule Book.
“The Bank has initiated the process for conversion from Conventional to Islamic Bank,” read the notification sent to the PSX.
BoK’s move reflects the growing trend among financial institutions in Pakistan shifting towards Shariah-compliant banking models. According to the State Bank of Pakistan (SBP), Islamic banking is defined as a banking system that is in consonance with the spirit, ethos, and value system of Islam and governed by the principles laid down by Islamic Shariah. Islamic banking, the more general term, is based not only on avoiding interest-based transactions prohibited in Islamic Shariah but also on avoiding unethical and unsocial practices.
SBP data shows that the assets of the Islamic banking industry increased by Rs192 billion during the quarter ending September 2024, reaching a total of Rs9,881 billion. Similarly, deposits continued to grow, rising by Rs233 billion over the same period to Rs7,596 billion.
On a year-on-year (YoY) basis, the Islamic banking industry recorded a 17.4% growth in assets and a 23.3% increase in deposits. The share of Islamic banking in the overall banking industry improved slightly from the previous quarter, reaching 19% in total assets and 23.2% in deposits.
Meanwhile, Chief Minister Khyber Pakhtunkhwa Ali Amin Khan Gandapur inaugurated BoK’s transition to Islamic banking and the event was attended by dignitaries including cabinet member Muzamil Aslam, Advisor to CM Khyber Pakhtunkhwa on Finance, Ikramullah Khan, Additional Chief Secretary P&D Government of Khyber Pakhtunkhwa, Aamer Sultan Tareen, Secretary Finance Govt of Khyber Pakhtunkhwa, along with Bank of Khyber BOD members & its management.
Hassan Raza, Managing Director & CEO of BOK thanked the respected guests and showcased BoK’s journey from 1991 to 2025 followed by his strategy for the way forward with a focus on a diversified product portfolio & strengthening of the existing branch network.
The highlight of the event was the official announcement of BoK’s transition to a full-fledged Shariah-compliant Islamic bank by Honorable Chief Minister Khyber Pakhtunkhwa Ali Amin Khan Gandapur.
CM Gandapur acknowledged BoK’s role in providing services all across the province and helping in creating opportunities and supporting individuals & businesses, paving the way for prosperity and socioeconomic development & uplift of the region.
The Bank of Khyber was established under The Bank of Khyber Act, 1991, and is principally engaged in the business of commercial banking and related services. The bank acquired the status of a scheduled bank in 1994.
