SCB Spotlights Islamic Finance Growth Across South Asia
• New report identifies significant opportunities to connect Islamic capital with high-growth markets across South Asia through stronger cross-border financing corridors
• Sukuk, private credit and digital infrastructure expected to drive the next phase of Islamic finance growth
KARACHI: A new Standard Chartered report highlights significant opportunities to strengthen Islamic finance connectivity across South Asia by better linking liquidity-rich markets with economies seeking long-term investment, reinforcing the growing role of cross-border Islamic finance in supporting regional trade, infrastructure and economic development.
According to Islamic Banking for Financial Institutions: The Islamic Finance Connector Era, Islamic finance assets now total approximately $6 trillion across nearly 100 jurisdictions. As global trade patterns evolve and investment increasingly flows through regional corridors, Islamic finance is emerging as a strategic connector of capital, trade and digital infrastructure.
The report identifies South Asia as one of the regions with significant untapped potential to attract greater Islamic capital, highlighting opportunities to strengthen cross-border connectivity between liquidity-rich markets and economies seeking long-term investment. These findings are particularly relevant for Pakistan, where expanding Islamic finance corridors with the GCC and other high-growth markets can help facilitate greater investment, support trade and unlock new opportunities for long-term economic development.
“Islamic finance is becoming a critical enabler of cross-border connectivity. As its role in facilitating trade, investment and capital flows continues to grow, financial institutions must place Islamic finance firmly on their strategic agenda,” said Khurram Hilal, CEO, Group Islamic Banking, Standard Chartered.
“As trade routes become increasingly interconnected, institutions need recognised financing structures and operational capabilities that enable Shariah-compliant capital to move seamlessly across borders.”
Rehan Shaikh, CEO & Head of Coverage Standard Chartered Pakistan, said, “trade and investment flows between the GCC, South Asia and other growth markets continue to evolve, creating new opportunities for Islamic finance to play a greater role in connecting capital with commerce. For Pakistan, strengthening these financial corridors can support businesses looking to expand regionally, attract investment and access a wider pool of Shariah-compliant financing solutions.”
The report finds that while Islamic finance liquidity continues to deepen, capital deployment remains uneven. Today, only 6 per cent of global Sukuk capital reaches South Asia and Africa, highlighting a significant opportunity to better connect liquidity-rich investors with markets seeking long-term development financing.
It also identifies evolving trade corridors between the GCC, South Asia and other emerging markets as creating new opportunities for Islamic trade finance, cross-border investment and capital mobilisation. Beyond public markets, the report highlights the growing importance of private credit, digital infrastructure and tokenisation in expanding access to Islamic capital and strengthening regional financial connectivity.
“The challenge for many markets today is not a shortage of liquidity, but how to connect that liquidity with opportunity more effectively across borders,” Khurram Hilal added. “Financial institutions that build trusted connections between capital, markets and digital infrastructure will be best positioned to support sustainable growth across emerging economies.”
As the first international bank to be awarded an Islamic banking licence in Pakistan, Standard Chartered has played a pioneering role in the development of Islamic finance in the country and continues to connect clients with cross-border financing, investment and trade opportunities through its network across Asia, Africa and the Middle East.
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