KARACHI, Oct 21: Pakistan's second full-fledged Islamic bank, Bank Islami Pakistan Ltd., on Thursday said it expects to begin operations early next year.

The Securities and Exchange Commission of Pakistan (SECP) has approved the incorporation of the bank with an authorized capital of Rs2.1 billion, the bank said in a statement. "The bank plans to commence its operation from Karachi by early next year," it said.

Currently, Meezan Bank Ltd. is the only full-fledged Islamic bank in Pakistan, while six conventional banks have been allowed to open 18 Islamic banking branches.

Ayesha Ashraf Jangda, a spokeswoman of Bank Islami, said it would target retail business as its core activity, offering Sharia-compliant integrated financial solutions for the first time in Pakistan. The bank's focus on Sharia-compliant wealth management has generated considerable interest in the Middle East and elsewhere, she said.

The bank is primarily backed by Jahangir Siddiqui & Co. and the UK's DCD Group. Jahangir Siddiqui is a financial brokerage and investment banking firm while DCD Group has a track record of selling Islamic financial products in the UK.

Pakistan's Islamic banking sector has been steadily growing, with assets at newly emerged Islamic banks and branches almost tripling year on year to Rs34 billion in the nine months to January this year.-Dow Jones Newswires