Implementation and performance of interest-free banking in Pakistan (Ph.D. Dissertation)

In an attempt to conform its economy with Islamic beliefs, Pakistan developed a system of interest-free banking, effective July 1985. This dissertation evaluates the success of interest-free banking by examining its performance in terms of sources and uses of funds, profitability, and rates of return on deposits and finance at various transitional stages, at both an aggregate and disaggregated level involving nationalized commercial banks and selected foreign banks. The process of implementing interest-free banking and the central bank policies are also examined. The analysis is placed in a macroeconomic perspective of the three periods, and the legal framework of money and banking. The selected foreign banks outperformed the nationalized commercial banks.