State Bank of Pakistan Issues Instructions on Shariah Non-Compliance Risk Management to Strengthen Industry 

On the 14th of June 2021, the State Bank of Pakistan (SBP) issued instructions on Shariah non-compliance risk (SNCR) management.

Why it Matters?

According to a statement by the bank, the aim of this is to enhance the stability and soundness of Islamic banking, given that the foundation of Islamic banking lies in compliance with the respective Shariah principles and rules across all business activities and operations. SNCR is a unique risk faced by Islamic banking institutions (IBIs) and should be mitigated in a proactive manner. It also noted that there currently is a lack of uniform practices in this regard.

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