Research paper authored by Dr. Rukhsana Kalim, Dean, SBE-UMT and co-authored by Ms. Afia Mushtaq, Lecturer, SBE-UMT and Mr. Noman Arshed, Lecturer, SBE-UMT published in IBFR (Vol. 3, Issue 1)Wednesday, March 16, 2016
The research paper authored by Dr. Rukhsana Kalim (Dean, School of Business and Economics, UMT), Ms. Afia Mushtaq (Lecturer, School of Business and Economics, UMT), and Mr. Noman Arshed (Lecturer, School of Business and Economics, UMT) titled "Islamic Banking and Economic Growth: Case of Pakistan" had been published in Islamic Banking and Finance Review (Vol. 3, Issue 1).
Islmic banking in Pakistan has gained recognition in last ten to eleven years. Islamic banks offer many products which are different from conventional banking and the most significant constituent is zero interest. Currently, a chunk of people have motivation towards Islamic banking compared to conventional banking in view of its growth in terms of assets, investment and deposits. This growing number of Islamic banking institutes indicates an increased trend of Islamic banking in Pakistan. People trust on this mode of banking motivates different conventional banks to open Islamic windows besides full-fledged Islamic branches to cater the increasing demand of people in Pakistan. The present study investigates short run and long run relationship between Islamic finance development, its various products and economic growth in Pakistan. Using quarterly data for the period 2006-2013, the study applied bound integration test and error correction models (ECMs) developed within an autoregressive distributed lag (ARDL) structure. The study found that there is a supply side relation between economic growth and Islamic banking in Pakistan. The study also found that Islamic banking industry exerts significant impact on economic growth.