BankIslami has launched what it describes as Pakistan’s first Islamic Gold-Based Financing facility, giving customers an alternative way to access financing by pledging their gold while keeping the transaction within Islamic banking principles.
The facility allows eligible customers to obtain financing of between PKR 250,000 and PKR 5 million, with repayment tenures ranging from one to four years. Financing can reach up to 70% of the net value of the pledged gold, subject to the bank’s eligibility requirements and applicable terms and conditions.
The launch is part of BankIslami’s broader effort to expand Shariah-compliant retail financing options and provide customers with liquidity for genuine personal financial needs without relying on conventional interest-based gold loans.
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Key Takeaways
- Bank: BankIslami Pakistan Limited
- Product: Gold-Based Financing
- Market position: Described by BankIslami as Pakistan’s first Islamic Gold-Based Financing facility
- Financing amount: PKR 250,000 to PKR 5 million
- Gold financing ratio: Up to 70% of the net value of pledged gold
- Repayment tenure: 1 to 4 years
- Eligible customers: Salaried individuals, self-employed professionals and businesspersons
- Gold purity: Minimum 21 karat
- Permitted needs: Medical, education, marriage and other genuine Shariah-compliant personal needs
- Gold security: Tamper-proof bags, secured/fireproof vaults and dual-control custody
- Takaful: Gold is covered during the financing tenure
- Application: Customers can apply through authorized BankIslami branches.
What Is BankIslami’s Gold-Based Financing?
BankIslami’s Gold-Based Financing is a consumer financing facility that allows customers to obtain financing against pledged gold ornaments. The gold remains securely held by the bank until the financing is settled.
Unlike a conventional gold loan, the facility is designed around a Shariah-compliant financing structure. BankIslami’s current product documentation says the facility uses Tawarruq, with Shariah-compliant Mutual Fund Units serving as the underlying asset. The bank’s launch announcement separately describes the transaction as being built around Musawamah, a Shariah-compliant sale mechanism.
The bank says the product has been approved by its Shariah Board and is intended to provide an asset-backed alternative to interest-based financing.
How Much Financing Can Customers Get?
Customers can apply for financing starting from PKR 250,000, with a maximum financing amount of PKR 5 million.
The bank can finance up to 70% of the net value of the pledged gold. The final financing amount therefore depends on the assessed value of the customer’s eligible gold as well as the bank’s approval criteria.
Gold valuation is carried out through BankIslami-approved goldsmiths. The bank assesses the net gold weight and purity, with a minimum purity requirement of 21 karat. Stones, alloys, wax and other non-gold materials are excluded from the valuation.
Who Can Apply?
The facility is available to:
- Salaried individuals
- Self-employed professionals
- Businesspersons
Applicants must meet BankIslami’s eligibility requirements, including applicable income requirements, satisfactory credit history and compliance with State Bank of Pakistan and BankIslami policies.
BankIslami’s FAQ currently lists a minimum net disposable income of PKR 80,000 as an eligibility requirement.
What Can the Financing Be Used For?
The facility is intended for genuine and dire personal financial needs that comply with Shariah requirements.
BankIslami specifically identifies purposes including:
- Medical expenses
- Education expenses
- Marriage-related expenses
- Payment of conventional liabilities
Other purposes may require prior Shariah approval.
This makes the product particularly relevant for customers who have valuable gold assets but need liquidity for significant personal expenses while seeking an Islamic financing alternative.
How Is the Gold Protected?
Security and custody of the pledged gold are important parts of the facility.
According to BankIslami, pledged gold is:
- Valued by bank-approved goldsmiths
- Sealed in tamper-proof bags
- Stored in secured/fireproof vaults
- Held under dual-control mechanisms
- Covered under Takaful throughout the financing tenure
The arrangement allows customers to use their gold as security while the physical assets remain under the bank’s custody until the financing has been settled.
What Is the Repayment Tenure?
Customers can select a repayment period between one and four years, with monthly instalments.
BankIslami’s product toolkit lists the financing pricing as 1-Year KIBOR + 8%, while the current customer-facing page says the final benchmark-linked profit rate is communicated in the Offer Letter. Customers should therefore rely on the applicable Offer Letter and current Schedule of Charges for their specific financing.
Why This Matters for Islamic Banking in Pakistan
BankIslami’s launch adds another secured financing option to Pakistan’s expanding Islamic banking market.
Gold is already widely held by Pakistani households as a store of value, but accessing liquidity against gold has traditionally been associated with conventional gold loans and interest-based financing. The new facility gives customers seeking Shariah-compliant products another route to use their gold assets for genuine financial needs.
The facility also expands BankIslami’s retail financing portfolio and reflects the bank’s stated focus on financial inclusion, customer-focused innovation and making Islamic banking more accessible.
Why Customers May Consider the Facility
Higher financing limit: Customers can obtain up to PKR 5 million, subject to the value of their pledged gold and eligibility criteria.
Longer repayment period: The facility provides tenures of up to four years, giving customers more flexibility in managing monthly repayments.
Shariah-compliant structure: BankIslami says the facility has been approved by its Shariah Board and is designed as an alternative to conventional interest-based gold financing.
Secure gold custody: Pledged gold is stored under controlled security arrangements and covered by Takaful during the financing period.
Multiple personal uses: Financing can be used for approved needs such as healthcare, education, marriage expenses and repayment of conventional liabilities.
Frequently Asked Questions
What is BankIslami Gold-Based Financing?
It is a Shariah-compliant consumer financing facility that allows eligible customers to obtain financing against pledged gold while the gold remains securely held by BankIslami until settlement.
How much financing can I get against gold?
Customers can obtain between PKR 250,000 and PKR 5 million, with financing of up to 70% of the net value of eligible pledged gold.
How long is the repayment period?
The available financing tenure ranges from one year to four years, with monthly instalments.
Who is eligible for BankIslami Gold-Based Financing?
Salaried individuals, self-employed professionals and businesspersons can apply, subject to the bank’s eligibility criteria, income requirements and credit-history requirements.
What type of gold is accepted?
BankIslami’s current FAQ states that gold is valued based on net weight and purity, with a minimum purity of 21 karat. Stones and other non-gold materials are excluded from the valuation.
What can I use the financing for?
The facility can be used for genuine Shariah-compliant personal needs, including medical expenses, education, marriage-related expenses and payment of conventional liabilities.
Is the gold safe while it is pledged?
BankIslami says pledged gold is sealed in tamper-proof bags, stored in secured/fireproof vaults, held under dual control and covered by Takaful during the financing tenure.
Is BankIslami’s Gold-Based Financing Shariah-compliant?
Yes. BankIslami states that the facility is Shariah-compliant and approved by its Shariah Board. Its current product information describes the financing structure using Tawarruq, while the launch announcement describes the solution through Musawamah.
How can customers apply?
Customers can apply by visiting an authorized BankIslami branch. The bank also provides assistance through its phone banking service at 111-ISLAMI (111-475-264).
