PHOTO: FILE
The new requirements come at a time when Pakistan is stepping up efforts to develop Islamic finance, prompting several banks to expand their operations in the sector.
Banks will have to obtain written approval from the State Bank of Pakistan before opening each Islamic window, as well as providing the regulator with additional details on staffing, training and marketing arrangements.
Islamic windows allow conventional lenders to offer Islamic financial services, provided client money is segregated from the rest of the bank.
As of December, Pakistan's full-fledged Islamic banks had a combined network of 767 branches while conventional banks had 441 Islamic branches and 96 sub-branches, the central bank said.
Different approaches to the Islamic window format have emerged over the years: In Oman, windows are allowed only through standalone branches, while in 2011 Qatar banned Islamic windows outright.
The rules could help consumers better distinguish Islamic financial products from conventional ones, improving the industry's perception and overall uptake.
Regulators in Pakistan hope to expand the industry's branch network and bring Islamic banking' s market share to 15 percent of the system by 2018.
As of December, Islamic banks held assets worth 1 trillion rupees ($10 billion), a 21.1 percent increase from a year earlier and representing 11.2 percent of total banking assets.
Some conventional lenders are also opting to convert their operations into full-fledged Islamic banks.
Last week, the majority shareholder of Karachi-based Faysal Bank said it would convert the bank into a full-fledged Islamic unit in the next two to three years.
And last year, Summit Bank said it would convert itself into a full-fledged Islamic bank over a three- to five-year period. It opened its first Islamic banking branch earlier this month.
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@AZ:
Then, my friend tell me the truth, in a culture in which lying is considered smartness, please be the dumb one.
Banks are for profit business enterprise, please explain to me how a Islamic bank makes money? What is the motive of the customer to put money in the bank? If thetre is no interest then why is a bank necessary?
I guess you are victim of Islamicx propaganda machine like so many millions. You have lost the capability of thinking for yourself.
So my friend tell me single truth that I can believe.
Hope to hear from you soon.
Assalam o Alikum! Please do'nt comment without knowing the truth.Islamic Banking in Pakistan is 100% riba free Banking.
Isllamic banking is a joke; first the banks are supposed to keep client's money safe, not in the case of Pakistani banks; one day you deposit the money, next day you have no money.
Second "interest" by any other name is still "Intretrest"
@vaqas: You can then keep your money at your home. you dont need to goto the bank.
there is a difference in how a muslim thinks about money with others. eg a muslims should earn halal living and consider this world as a test where he his life is temporary. Should not he trade with Allah by donating his surplus wealth to get 70 times profit. In Islam, if someone has Rs 100 and he gives Rs 2.5 as zakat and few as Khirat, so for non-muslims its reduction in his wealth but for a muslim this is mandatory, the zakat part, which purifies his wealth and khirat keeps away sarrows. May be Allah gives one from such sources which he never thought off. So Finance and Accounting does not apply in Islamic principles. If we help these islamic banks by keeping deposit, rather than keeping it in conventional banks - current account, we can contribute in development of islamic compliant products. Baki qabar apni apni
Can somebody explain what "Islamic Banking" is? Is it a bank that pays no interest on the money deposited by the customer? If a non-Islamic bank does not pay its depositors any interest does it become Islamic? I am a bit confused.
Islamic banking should be promoted and SBP make sure that the mony should be invested in true sharia-compliance manner. Nothing should be hidden from depositor.