This　study　compares　the　execution　and　potency　of　the　Islamic　banking　operations　currently　practiced　by　Pakistan　and　Malaysia　Islamic　banks.　In　the　1980s　both　countries　embarked　their　work　on　the　Islamic　banking　system　by　using　different　entirely　approaches.　Malaysia　adopted　moderate　solicitations　towards　the　implementation　of　the　Islamic　financial　system　according　to　the　shariah　and　law,　which　allows　Islamic　and　the　conventional　banking　system　to　operate　on　a　parallel　basis.　On　the　other　side,　Pakistan　engaged　in　converting　the　financial　system　in　accordance　with　the　Islamic　shariah　and　law　all　at　once.　This　study　assays　the　approaches　pursued　by　both　countries　towards　the　adoption　of　the　Islamic　banking　system.　For　this　meticulous　prospect　DEA　(Data　envelopment　analysis),　Malmquist　total　factor　productivity　index　is　used.　To　inspect　the　competency　of　the　banks　and　further　performance　of　these　banks　in　comparison,　eleven　financial　ratios　are　used　in　this　study.　We　find　that　the　productivity　level　of　the　Islamic　banking　system　of　Pakistan　has　increased　as　compared　to　the　Malaysian　Islamic　banks　by　using　data　envelopment　analysis.　©　2019　AESS　Publications.　All　Rights　Reserved.