The State Bank of Pakistan, on Friday, guided the financial institutes to follow Shariah-related measures. The bank also updated its guidelines as introduced in 2004 to operate under the Islamic banking laws.
The statement fro SBP aims to facilitate 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
The updated guidelines deal with the establishment of a full-fledged Islamic bank, Islamic banking subsidiary, and Islamic banking branches of conventional banks,State Bank of Pakistan
“Moreover, these guidelines cover different areas including minimum capital adequacy, requirements related to sponsor directors, business plan, Shariah governance, application fees, and preconditions for the commencement of business,” as reported.
SBP also highlighted that the updates for conventional banks and Development Finance Institutions (DFIs) are to follow Shariah-compliant business and operations with coverage on the eligibility criteria for in-principle approval, proposal requirements, Shariah governance, minimum capital requirement, and systems and controls.