Similarities in the Practices of Pakistani Islamic Banking Windows and FullFledged Islamic Banks in Managing Liquidity

Abstract

A significant global growth of the interest-free financial system is currently taking  place. This expansion has been demonstrated by a discernible rise in the number of banks, branches, accounts, and deposits. Over thirty years ago, commercial banking and financial operations began to comply with Sharia’h. Its development and  diversification have been substantial since then. Islamic finance has drawn a lot of  interest from academics and decision-makers in recent years. The Islamic financial industry has thrived in spite of numerous barriers and distrust from detractors, but it still faces difficulties. The branch network of Islamic banking has been steadily growing, growing at a pace of 6.2% every quarter. 289 new branches have been established as a result of this expansion. The total number of Islamic banking institutions' branches as of the end of 2023 was 4,955. This expansion has also made ]
it more difficult to manage liquidity concerns and properly align assets and liabilities.  Liquidity management involves luring money from depositors and then juggling demands for funds from lenders and depositors looking to recoup their investment. 
Working capital management, another name for liquidity management, is generally believed to involve managing both current assets and current liabilities, including cash, marketable securities, receivables, and inventories. By examining liquidity 
management in Islamic banks, this study aims to investigate the topic of Islamic banking and finance. There is a dearth of research on Shari'ah-compliant liquidity management, especially in Pakistan. Because Islamic banks have to overcome the challenge of converting short-term deposits into long-term financing, they are vulnerable to liquidity problems. Additionally, this study aims to promote consistency in the methods used by Pakistani Islamic banks to manage liquidity.