Increasing efforts: SBP tightens rules on Islamic banking windows
Banks will have to obtain written approval from the central bank before opening each Islamic window.
Regulators in the country hope to expand the industry’s branch network and bring Islamic banking market share to 15% of the system by 2018. PHOTO: FILE
The State Bank of Pakistan (SBP) has issued new rules for the operation of Islamic banking windows, aiming to strengthen their role in the world’s second-most populous Muslim nation. 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 central bank before opening each Islamic window, as well as provide 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. Regulators in the country hope to expand the industry’s branch network and bring Islamic banking market share to 15% of the system by 2018.
Published in The Express Tribune, March 29th, 2014.
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