KARACHI, March 31: The State Bank on Thursday allowed BankIslami Pakistan to start operations as a full-fledged Islamic bank.

SBP Governor Dr Ishrat Husain handed over the licence to BankIslami’s chief executive Hassan Aziz Bilgrami at a ceremony held here, says a press release issued by the central bank.

BankIslami Pakistan Ltd, owned jointly by brokerage house Jahangir Siddiqui and Co and the UK-based DCD Group, is the third bank to receive the licence for operating an Islamic bank in Pakistan. The other two are Meezan Bank and Al-Baraka Islamic Bank. Besides, nine

other banks operate 29 Islamic branches.

Islamic banking is gaining popularity in Pakistan and in 2004 total assets of Islamic banking institutions grew by 244 per cent to Rs44 billion whereas deposits grew by 263pc to Rs30.5 billion.

Meanwhile, a press release issued by BankIslami said the bank would start operations with authorized capital of Rs2.1 billion. It said the bank plans to file shortly an application with the Karachi Stock Exchange for the quotation of its shares on the ready board counter.