Islamic Banking is famous and encouraging in Pakistan like all other Muslim and non-Muslim countries since January. Financial stability has always been a great conventional concern for the banking authorities all over the world. Same is the case with Islamic Banking due to strong demands/requirements for Shariah Compliance products and services. The Islamic banks and financial institutions are increasing in numbers at a much faster in comparison with conventional banks, especially in the Islamic countries in the last 30 years and on ward. Now there are all most 200 Islamic banks providing Shariah Complains Banking in more than 70 Muslim and nonMuslim countries. The strength and financial health of the Islamic banks of Pakistan was analyzed by using “AID model” (Assets, Investments and Deposits). Moreover, some qualitative factors were also given due weight like perception/expectations of customers, businessmen & entrepreneurs to fulfill their modern professional needs. The data of all the Islamic banks working in Pakistan was gathered and analyzed in order to prove quantitatively through AID model that Islamic banks have shown a remarkable growth as a milestone for future Islamic banking. Supervisor:- Mufti Yasir Ahmad