Economic analysis of Islamic banking in Pakistan

Islamic banking has achieved substantial growth in Pakistan and all over the world in the last two decades or so. Despite the financial and economic crisis of 2007-2010, the Islamic banking industry has witnessed exemplary and uninterrupted growth. In Pakistan, it has achieved market share of almost nine percent in the banking industry. There is vast literature available on explaining the features and mechanics of Islamic bankinghowever, limited attention has been paid on the thorough analysis of Islamic banking architecture from finance, economics, and development point of view. Though, there exists substantial body of literature explaining the negative effects of interest based institutions in Capitalism. But, little has been written on conducting a meaningful and objective economic analysis of Islamic banking practices. This paperattempts to touch upon an overlooked area which is a thorough and objective analysis of Islamic banking with its economic merits and shortcomings