SBP issues guidelines for DFIs

Aims to facilitate new entrants in field of Islamic banking

The State Bank of Pakistan (SBP) has issued guidelines for the Development Finance Institutions (DFIs) to undertake Shariah-compliant business.

In a statement issued on Friday, the central bank stated that keeping in view the various developments, such as changes in the licensing and regulatory regime for banks, the SBP has updated the guidelines, introduced in 2004, for establishing Islamic banking institutions.

Move 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," it said.

"Moreover, these guidelines cover different areas including minimum capital adequacy, requirements related to sponsor directors, business plan, Shariah governance, application fees, and preconditions for commencement of business."

The central bank stated that 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.

Published in The Express Tribune, October 3^rd, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.