KARACHI: Approving the concept of airtime-based Sukuks, the Shariah Supervisory Board (SSB) of Meezan Bank gave its consent on Friday for the issuance of the Islamic financial instrument that will use mobile phone airtime as an underlying asset in structuring financial products in Pakistan.
The SSB also approved detailed guidelines related to the sharing of security with other banks for the long-term Islamic project and structured financing, according to a statement released by Meezan Bank.
The SSB took these decisions during its 19th meeting, held at the Darul Uloom Korangi, Karachi. The meeting was chaired by Meezan Bank SSB Chairman Justice (retd) Mufti Muhammad Taqi Usmani. Meezan Bank President and CEO Irfan Siddiqui and Chief Operating Officer Ariful Islam also attended the meeting.
Sukuk is a Shariah-complaint financial certificate, which is similar to a conventional bond in some ways. Since the interest-paying bond structure is not permissible under Shariah law, the issuer of a sukuk sells an investor group the certificate, who then rents it back to the issuer for a predetermined rental fee, according to financial information website Investopedia.
One of Asia’s largest telecoms operators – Axiata Group Berhad of Malaysia – have also launched Sukuks earlier this year using mobile phone airtime as one of the underlying assets.
Published in The Express Tribune, December 1st, 2012.