Punjab Provincial Cooperative Bank Limited (PPCBL) has formally engaged the AlHuda Center of Islamic Banking and Economics (AlHuda CIBE) to lead its transition from conventional banking operations to a fully Shariah-compliant model.
The advisory agreement was signed in Dubai by Mr. Muhammad Zubair, CEO of AlHuda CIBE, and Mr. Shahraam Raza Bakhtari, president of PPCBL. The partnership marks a critical step in the bank’s strategic pivot toward Islamic finance, aligning with Pakistan’s national objective to transform its economy to Islamic principles by 2028.
A comprehensive transformation strategy
Under the terms of the agreement, AlHuda CIBE will provide end-to-end advisory support to the bank. This includes designing a Shariah governance framework, developing compliant banking products, and preparing operational manuals and policies.
A significant portion of the mandate focuses on human capital. AlHuda CIBE will oversee structured staff training and capacity-building programs to ensuring the workforce is equipped to manage the nuances of Islamic finance.
Mr. Shahraam Raza Bakhtari, emphasised that the bank is adopting a “gradual and structured transformation process”.
“A key focus of this initiative will be strengthening staff capacity and institutional readiness so that Islamic banking is implemented in its true spirit,” Bakhtari said. He reaffirmed the bank’s goal to become a “fully-fledged Islamic bank” within the agreed timeframe.
Mr. Muhammad Zubair, noted that PPCBL’s cooperative structure offers a unique advantage for extending Islamic banking services to a broader segment of society. “With a well-planned and disciplined approach, PPCBL will successfully migrate toward Islamic banking operations,” he added.
Aligning with national mandates
The move comes as regulators in Pakistan—the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP)—intensify efforts to promote an interest-free financial system. Recent initiatives have focused on expanding the market share of Islamic banking, enhancing Shariah governance, and developing liquidity management instruments like Sukuk.
By prohibiting interest (Riba) and excessive uncertainty (Gharar), the Islamic banking model is viewed as particularly relevant for cooperative and community-based institutions like PPCBL, emphasising risk-sharing and asset-backed transactions.
The initiative is expected to serve as a reference model for other banks in the region currently considering similar conversions.
