KARACHI: In order to enlarge the scope of Shariah-compliant financial services in the country, the State Bank of Pakistan (SBP) has issued guidelines for Development Finance Institutions (DFIs) to undertake Shariah-compliant businesses and operations. Further, keeping in view changes in the licencing and regulatory regime for banks, SBP has also updated the guidelines, introduced in 2004, for establishment of Islamic banking institutions. The updated guidelines deal with the establishment of a full-fledged Islamic bank, Islamic banking subsidiary and Islamic banking branches of conventional banks. The guidelines for conventional banks and DFIs to undertake Shariah compliant business and operations also cover the eligibility criteria for in-principle approval, proposal requirements, shariah governance, minimum capital requirement and systems and controls. It is expected that these guidelines will facilitate the new entrants in the field of Islamic banking through establishment of full-fledged Islamic banks, Islamic banking subsidiaries by conventional banks and the commencement of Shariah compliant business and operations by conventional banks and DFIs.

Source: Pakistan Today October 02, 2020 15:00 UTC