State Bank of Pakistan Sets Guidelines for Development Financial Institutions with Respect to Islamic Banking

According to a statement issued on the 2nd of October 2020, the State Bank of Pakistan (SBP) has updated guidelines (previously introduced in 2004) pertaining to the establishment of Shariah-compliant businesses in Pakistan, for Development Financial Institutions (DFIs).

The SBP states that the updated guidelines seek to facilitate new entrants into the Islamic banking industry through the establishment of stand-alone, fully-fledged Islamic banks, Islamic banking subsidiaries by conventional banks, as well as the commencement of Shariah-compliant businesses and operations by conventional banks and DFIs.

The revised guidelines cover many different areas such as minimum capital adequa...