Islamic Banking in Iran and Pakistan: A Comparative Study

In recent years, several Muslim countries have made ambitiousattempts to practise Islamic banking. Iran and Pakistan appear to beparticularly active in transforming their banking and financial sectorscompletely in line with the dictates of shariah [N aqvi (1981)]. Thepresent study aims to contribute to the understanding of the process ofIslamisation of banking in these countries. This kind of understanding,it is believed, is important for policy-makers guiding the Islamisationprocess anywhere in the world. The study tracks, over a period of adecade, the routes Iran and Pakistan have taken to attain their avowedobjective, and focusses on the common concerns they share in theirrespective pursuits. The study also discusses the ~iverging sets ofproblems faced by these countries. The limited amount of empiricalresearch in the area of Islamic banking has left many policy-relatedquestions unanswered. One reason for the scarcity of studies on thesubject has been the lack of suitable information. However, with theavailability of some patchy but useful data at hand it is now possibleto arrive at some interesting conclusions in a systematicfashion.