Raqami Islamic Digital Bank has officially obtained a commercial banking licence in Pakistan, marking a significant milestone for digital Islamic banking in the country. The Karachi-based institution, backed by the Kuwait Investment Authority, has completed its pilot operations and is now authorized to commence full-scale commercial operations after receiving approval from the State Bank of Pakistan.
The Kuwait Investment Authority, Kuwait’s sovereign wealth fund, has provided financial backing for this digital banking venture. According to The Nation, Pakistan Prime Minister Muhammad Shehbaz Sharif emphasized the importance of this development for bilateral relations, stating that Pakistan and Kuwait share decades of strong cultural, political, and people-to-people ties that now extend into economic and investment cooperation.
Journey to Commercial Banking Licence
Raqami Islamic Digital Bank first received a restricted banking licence from the State Bank of Pakistan in May of the previous year. This initial authorization allowed the institution to conduct pilot operations and test its digital banking infrastructure before scaling up to full commercial services.
During the pilot phase, the bank developed its technological foundation to ensure compliance with regulatory requirements. The successful completion of these pilot operations paved the way for the upgrade to a full commercial banking licence.
Technology and Service Infrastructure
The digital bank has built a comprehensive technology platform featuring open APIs, banking-as-a-service capabilities, and extensive automation systems. These technological foundations are designed to support partnerships with fintech companies, telecommunications operators, and other strategic collaborators in Pakistan’s financial ecosystem.
Additionally, the infrastructure enables the delivery of real-time, personalized financial services that remain fully Shariah-compliant. This approach positions Raqami Islamic Digital Bank to serve customers seeking both modern digital convenience and adherence to Islamic banking principles.
Investment Plans and Growth Targets
According to CEO Umair Aijaz, Raqami Islamic Digital Bank intends to invest $100 million over the next five years as it establishes its market presence. This substantial investment reflects the institution’s commitment to building robust digital infrastructure and expanding its service offerings across Pakistan.
The bank has set ambitious customer acquisition goals, targeting at least one million customers within three years of commencing operations. Meanwhile, its strategic focus will center on small commercial lending, addressing a significant gap in Pakistan’s financial services market.
Focus on SME Sector
In an interview conducted in Karachi, Aijaz expressed enthusiasm about entering the small and medium-sized enterprise space through digital banking channels. He noted that digital banking for SMEs has gained considerable traction globally, presenting a proven opportunity for Pakistan’s market.
However, the bank will need to navigate competitive challenges as it seeks to differentiate itself in Pakistan’s evolving digital banking landscape. The combination of Islamic banking principles and digital-first services represents a distinctive positioning strategy.
Regional Banking Cooperation
The involvement of the Kuwait Investment Authority underscores growing Gulf investment in South Asian financial technology and banking infrastructure. In contrast to traditional brick-and-mortar banking expansion, this digital-first approach requires lower capital expenditure while potentially reaching underserved markets more effectively.
The commercial banking licence represents a vote of confidence from Pakistani regulators in Raqami’s operational capabilities and technological readiness. Authorities have not confirmed specific timelines for when services will become available to the general public, though the bank is expected to begin onboarding customers in the coming months as it scales operations.
