Abstract
Pakistan has vigorously resurrected Islamic banking in 2002 and State Bank of Pakistan has issued license to 1st full-fledged Islamic bank of the country. Within twelve years the Islamic Banking industry has crossed few millstones and today Islamic Banking industry is serving the people with more than fourteen hundred branches all over the country. After the success of Islamic banking and acceptability by the masses now every conventional bank showing interest to inter into Islamic banking market, there are different ways permitted by regulators for conventional counterpart of Islamic banks to inter into the market and one of them is conversion of Conventional Banking Branches ,(CBB’s) into Islamic Banking Branches (IBB’s). In Pakistan, conversion of CBB’s into IBBs has started in 2003-04 which has been increased since 2010 and it is expected that the regulator will allow more conventional banks to convert their CBB’s into IBBs. While this growth is very encouraging sign for Islamic financial industry hence there are some Shariah rules and principle which must be followed strictly to make the practice Shariah compliant and within the parameters given by the Regulator. This paper address present Practice, relevant Shariah principles and guide lines issued by the regulator regarding conversion of CBB’s into IBBs along with recom - mendations regarding some practical issues facing by CBB’s while conversion.