The banking and financial sector witnessed a remarkable sequence of developments during the outgoing calendar year, ranging from local mergers and acquisitions to foreign expansion, the entry of new players, and the closure of several companies.<\/p>\n\n\n\n
Competition intensified among banks and fintech operators, but institutions backed by innovation and strong business models took the lead in terms of market presence and profitability.<\/p>\n\n\n\n
Here are the major developments in Pakistan\u2019s banking and financial sector during 2025.<\/p>\n\n\n\n
United Bank Limited completed the merger and amalgamation of Silk Bank in 2025 in one of the most significant business transactions of the year. With this move, the banking industry eliminated a loss-making entity and strengthened sector consolidation for future growth.<\/p>\n\n\n\n
Fintech firm ABHI, in collaboration with TPL Corp, completed the acquisition of FINCA Microfinance Bank, which was subsequently renamed ABHI Microfinance Bank. The deal is considered notable in Pakistan and globally, as a leading fintech expanded its domestic and international footprint by acquiring a controlling stake in a microfinance bank.<\/p>\n\n\n\n
Mashreq Bank and Easypaisa commenced operations as digital retail banks in Pakistan in 2025. These entities were among the five operators granted digital banking licences and were the first to begin commercial operations, targeting the largely untapped unbanked population.<\/p>\n\n\n\n
ABHI expanded its operations across Pakistan, the UAE, and Bangladesh, and entered the Kingdom of Saudi Arabia during the year. The company signed a strategic partnership with Alraedah Digital Solutions and concluded additional business agreements with Tray and AlBauyt, making it one of the few Pakistan-based fintechs operating in Saudi Arabia.<\/p>\n\n\n\n
Haball, a PSP\/PSO operator, raised US$52 million through equity and debt and expanded its SME lending platform to Saudi Arabia. The company operates a Shariah-compliant supply chain finance platform, Wisaaq, through partnerships with funding banks. Its funding included a US$5 million equity investment from Zayn VC and US$47 million in off-balance-sheet strategic financing from Meezan Bank.<\/p>\n\n\n\n
The government decided to legalise cryptocurrency-related business in Pakistan in 2025 and established the Pakistan Virtual Assets Regulatory Authority (PVARA) as the first step.<\/p>\n\n\n\n
Subsequently, major crypto exchanges, including Binance and HTX, were granted no-objection certificates to obtain operating licences, set up local subsidiaries, and explore the tokenisation of up to US$2 billion in sovereign bonds, T-bills, and commodity reserves.<\/p>\n\n\n\n
Experts view the entry of global virtual asset platforms as a positive signal for restoring foreign investor confidence and attracting foreign direct investment, particularly at a time when several multinational companies are scaling back operations in Pakistan.<\/p>\n\n\n\n
Several fintech operators entered Pakistan after securing licences from the Securities and Exchange Commission of Pakistan.<\/p>\n\n\n\n
In 2025, the SECP granted NBFC licences to multiple companies, including Alif Finance (Private) Limited, a wholly owned subsidiary of Alif Capital Holdings, which has existing operations in Tajikistan and Uzbekistan.<\/p>\n\n\n\n
Licences were also issued to Foremost Financial Services and Instant Finance (Private) Limited, both of which have prior operating experience in international markets such as Indonesia, Mexico and Nigeria.<\/p>\n\n\n\n
Samba Bank and the Bank of Khyber separately announced plans to convert their operations from conventional to Shariah-compliant banking. Samba Bank received regulatory approval to become a full-fledged Islamic bank, while the Bank of Khyber took multiple steps towards full conversion with regulatory clearances.<\/p>\n\n\n\n
United Bank Limited also converted all its operations from conventional to Islamic banking in Khyber Pakhtunkhwa and Balochistan.<\/p>\n\n\n\n
Halan Microfinance Bank Limited, a subsidiary of Egypt-based MNT-Halan, was granted a nationwide microfinance banking licence. The group had acquired Advans Pakistan Microfinance Bank in March 2024 and rebranded it as Halan. In 2025, the bank focused on digital banking, mobile wallets, cards and Buy Now, Pay Later services.<\/p>\n\n\n\n
Mobilink Bank launched Islamic banking operations, enabling JazzCash to offer Shariah-compliant products. It established two dedicated Islamic banking branches in Karachi and Peshawar, along with ten Islamic banking windows nationwide.<\/p>\n\n\n\n
LOLC Microfinance Bank entered Pakistan\u2019s Islamic finance space with its first Islamic microfinance branch in Islamabad, while ASA Microfinance Bank received in-principle approval from the State Bank of Pakistan to launch Islamic microfinance products.<\/p>\n\n\n\n
Earlier, NRSP Bank and U Microfinance Bank had also introduced Shariah-compliant offerings.<\/p>\n\n\n\n
The State Bank of Pakistan launched the Pakistan Real-Time Interbank Settlement Mechanism Plus in June 2025 to enhance transparency, interoperability and automation in the payment and settlement system. PRISM+ also serves as a central securities depository platform for money market operations, including government securities auctions, secondary market trading, collateral management and open market operations.<\/p>\n\n\n\n
The central bank also introduced Pakistan\u2019s Financial Inclusion Index, which measures access to, usage of and quality of financial services. The index is based on sixty-nine indicators covering banking, non-banking and payment services.<\/p>\n\n\n\n
The State Bank of Pakistan announced the de-scheduling of SME Bank Limited following its liquidation under an Islamabad High Court order dated March 17, 2025, and assumed the role of official liquidator.<\/p>\n\n\n\n
Savyour, Pakistan\u2019s only cashback fintech startup, shut down operations despite raising US$3.3 million in seed funding and distributing more than Rs400 million in cashback rewards to four million users. The company was unable to sustain growth and profitability amid rising competition in the BNPL and e-commerce space.<\/p>\n\n\n\n
The Monetary Policy Committee maintained the policy rate at 11 percent until the third quarter of 2025 despite calls for reductions from the business community. In the final monetary policy decision of the year, the committee cut the rate by 50 basis points to 10.50 percent, which remains higher than rates in regional peers such as India and Bangladesh.<\/p>\n\n\n\n