The State Bank of Pakistan (SBP) has issued exclusive instructions on Shariah Non-Compliance Risk (SNCR) management, aimed at enhancing the stability and soundness of Islamic banking.
According to a statement issued on Monday, the central bank said that the foundation of Islamic banking lies in compliance with Shariah rules and principles in all its business activities and operations.
“SNCR is a unique risk faced by Islamic banking institutions (IBIs) and must be managed proactively,” it said.
“The increasing size of the industry in terms of assets and deposits, diversified operations, products and services makes focused management of SNCR a necessity.”
In addition, the adoption of uniform practices will help in maintaining consistency over time and across IBIs.
Published in The Express Tribune, June 15h, 2021.
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