Gulf banks seek Pakistan licence

Pakistan is likely to issue a new Islamic banking licence for Gulf banks – including one from Abu Dhabi – next year, a senior banking executive said.

At least two Gulf-based or Gulf-sponsored banks are operating in Pakistan and the new licence is likely to be in line with the central bank's drive to increase Islamic banking to 12 per cent of the banking sector by 2012 from the current five per cent.

"New licences will be issued. There is a strong possibility that an Islamic banking licence for the Gulf will be issued next year," said Pervez Said, a former director of Islamic banking at the State Bank of Pakistan who is going to be the CEO of Pakistan's Dawood Islamic Bank next month.

"Foreign banks are now in a position where they want to go in [to Pakistan]," he said on the sidelines of an Islamic retail banking summit.

Dubai Islamic Bank has had operations in Pakistan since 2006. Emirates Global Islamic Bank, which is owned by leading investors from the UAE and Saudi Arabia, started operations in 2007 in Pakistan.

"I can tell you there is at least one licence in the pipeline. The Middle East is the region where people still have money and are looking to invest," he said.