ISLAMABAD: Kuwait Investment Authority-backed Raqami Islamic Digital Bankis poised to become Pakistan’s first fully Shariah-compliant digital bank,with operations scheduled to commence in February 2026 following asubstantial $100 million investment commitment. This development, announcedrecently by Finance Adviser Khurram Schehzad, signals strengtheningeconomic ties between Kuwait and Pakistan while addressing the growingdemand for Islamic fintech solutions in the country. The initiative isexpected to enhance financial inclusion, particularly for underservedsegments such as small and medium enterprises, in a market where digitalbanking penetration remains limited despite rapid mobile adoption.
The $100 million investment plan, spread over the next five years,represents a strategic entry by Gulf capital into Pakistan’s burgeoningfintech sector. Backed by the Kuwait Investment Authority, one of theworld’s largest sovereign wealth funds, Raqami intends to allocate themajority of funds toward advanced technology infrastructure, robustinformation security systems, and skilled human resources. This substantialcapital injection underscores confidence in Pakistan’s economic recoveryand regulatory environment for Islamic finance, especially after recentreforms aimed at attracting foreign direct investment through bodies likethe Special Investment Facilitation Council.
Raqami Islamic Digital Bank has already invested significantly in itspreparatory phase, including approximately 8 billion rupees spent onfoundational setup. The bank operates under a strict Shariah-compliantframework, ensuring all products and services adhere to Islamic principlesthat prohibit interest and promote ethical financing. By focusing ondigital-only operations without physical branches, Raqami aims to reduceoverhead costs and offer competitive, accessible services such as seamlessaccount opening, instant transfers, and tailored financing options forindividuals and businesses.
A key target for Raqami is to onboard at least one million customers withinthe first three years of operation. This ambitious goal aligns withPakistan’s large unbanked and underbanked population, estimated at over 100million adults, many of whom rely on informal financial systems. The bank’semphasis on small and medium-sized enterprises positions it to fill acritical gap, as SMEs contribute significantly to employment and GDP butoften face barriers in accessing formal credit due to conventional bankingrequirements.
The launch of Raqami comes amid a broader trend of Gulf investments flowinginto Pakistan’s financial services sector. Kuwait’s involvement through itssovereign fund highlights renewed interest from Middle Eastern partners,building on historical economic linkages. Such foreign-backed ventures areanticipated to introduce international best practices in digital banking,cybersecurity, and customer-centric innovation, potentially elevatingstandards across the local industry and fostering competition amongexisting players.
Regulatory approval and licensing processes have been completed, allowingRaqami to proceed with its February 2026 rollout. The State Bank ofPakistan has supported the growth of digital and Islamic banking models topromote financial inclusion and digital economy objectives. Raqami’s entryis expected to complement other fintech developments while maintaining fullcompliance with Shariah standards certified by reputable boards, ensuringtrust among conservative Muslim customers who prioritize ethical banking.
Economists view this investment as a positive indicator for Pakistan’sexternal sector stability and investor sentiment. With foreign directinvestment inflows remaining a priority for the government, projects likeRaqami demonstrate how strategic partnerships can channel capital intohigh-impact areas. The focus on technology and security investments willlikely create jobs in IT and finance, contributing to skill development ina youth-dominated workforce.
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Challenges remain, including building digital literacy among potentialusers and ensuring cybersecurity in an environment prone to digitalthreats. However, Raqami’s substantial funding allocation for informationsecurity and user education initiatives is designed to mitigate theserisks. The bank’s model could serve as a blueprint for future Islamicdigital banking expansions in South Asia, where demand forShariah-compliant digital services continues to rise rapidly.
Overall, the Kuwait-backed initiative not only introduces Pakistan’sinaugural Islamic digital bank but also reinforces bilateral economiccooperation. As operations begin next month, Raqami is positioned to play atransformative role in modernizing financial access and supportinginclusive growth in the country.
Source:https://www.bloomberg.com/news/articles/2026-01-22/raqami-bank-set-to-launch-in-pakistan-with-100m-investment-plan
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