Pakistani Islamic banks will adopt new standards of Shariah financing in their operations and businesses designed by an international body for setting rules of Islamic banking.
State Bank of Pakistan (SBP) approved these standards through its internal Shariah board and ordered Islamic banks throughout the country to include these rules of business in their products that were duly accredited by Accounting and Auditing Organization for Islamic Financial Institutions (AAOFI).
Accordingly, full-fledged Islamic banks and Islamic banking divisions of conventional banks will now introduce various products in accordance with these rules such as Credit Cards, Charge Cards, and Debit Cards.
Banks may also enhance their scope of financing through new ways of products such as Qabd (Possession), Syndicated Financing, Guarantees and Documentary Credit as per new standards.
The adoption of these standards will not mean replacing current regulations, other instructions, and directives issued by SBP.
The Islamic banking industry has been proliferating across Pakistan at a fast pace. The banks’ profits, assets, and customers are on the rise with robust and constant growth. The introduction of new standards and new products are likely to give impetus to Islamic banks and the industry.
The network of Islamic banking industry consists of 21 Islamic banking institutions; 5 full-fledged Islamic banks (IBs) and 16 conventional banks with standalone Islamic banking branches (IBBs) spread over 111 districts of Pakistan with assets and a deposits base of above Rs. 2 trillion.