Chronological Summary of SBP Circulars related to Islamic Banking

Sr. Circular No. Date Subject

64 IFPD Circular No. 01 29-Aug-23 Adoption of 'Accounting and Auditing

Organization for Islamic Financial
Institutions' (AAOIFI) Shariah Standards

63 IBD Circular No. 01 4-Jul-22 Adoption of ‘Accounting and Auditing

Organization for Islamic Financial
Institutions’ (AAOIFI) Shariah Standards

62 IBD Circular No. 01 14-Jun-21 Shari'ah Non-Compliance Risk

Management
61 IBD Circular Letter No. 01 3-Feb-21 Shari’ah Governance Framework (SGF)
for Islamic Banking Institutions (IBIs)

60 IBD Circular No. 04 2-Oct-20 Guidelines and Criteria for Establishing

Islamic Banking Institutions (IBIs) and
Commencement of Shariah Compliant
Business and Operations by Development
Finance Institutions (DFIs)

59 IBD Circular No. 03 2-Sep-20 Adoption of 'Accounting and Auditing

Organization for Islamic Financial
Institutions' (AAOIFI) Shariah Standard(s)

58 IBD Circular No. 02 29-Jul-20 Revised Instructions on Islamic Banking

Windows (IBWs) Operations
57 IBD Circular Letter No. 02 23-Apr-20 Guidelines for Implementation of
Regulatory Relief to Dampen the Effects
of COVID-19

56 IBD Circular No. 01 3-Jan-20 Adoption of ‘Accounting and Auditing

Organization for Islamic Financial
Institutions’ (AAOIFI) Shariah Standards

55 IBD Circular Letter No. 01 2-Jan-20 Enhanced Training & Capacity Building
Measures for Islamic Banking Institutions
(IBIs)

54 IBD Circular No. 01 1-Mar-19 Adoption of 'Accounting and Auditing

Organization for Islamic Financial
Institutions' (AAOIFI) Shariah Standards

53 IBD Circular No. 02 29-Jun-18 Enhanced Training & Capacity Building

Measures for Islamic Banking Institutions
(IBIs)
52 IBD Circular No. 01 7-Jun-18 Shari’ah Governance Framework (SGF)
for Islamic Banking Institutions (IBIs)

51 IBD Circular Letter No. 01 11-Apr-18 Change in nomenclature of ‘SBP Shariah

Board’ to ‘Shariah Advisory Committee’

50 IBD Circular No. 01 6-Jul-17 Guidelines for Conversion of a

Conventional Bank into an Islamic Bank

49 IBD Circular Letter No. 01 27-Mar-17 External Shari’ah Audit Report (Para 7) -
Shari’ah Governance Framework for
Islamic Banking Institutions (IBIs)
48 IBD Circular No. 01 8-Sep-16 Exemption from KIBOR as Benchmark
rate for Participatory and Wakalah
Modes Based Products

47 IBD Circular Letter No. 01 12-Apr-16 Report of Shari’ah Board – Para 3(E) of
Shariah Governance Framework

46 IBD Circular Letter No. 01 30-Jun-15 Shariah Compliant Solutions for Foreign
Bill Discounting

45 IBD Circular No. 01 7-Apr-15 Shari’ah Governance Framework for

Islamic Banking Institutions (IBIs)

44 IBD Circular Letter No. 03 30-Sep-14 Shariah Governance Framework for

Islamic Banking Institutions (IBIs)
43 IBD Circular Letter No. 02 14-Apr-14 Shariah Compliant Solutions for Foreign
Bill Discounting

42 IBD Circular No. 03 4-Apr-14 Shari’ah Governance Framework for

Islamic Banking Institutions (IBIs)

41 IBD Circular No. 01 3-Apr-14 Free-of-cost Priority Banking Services

40 IBD Circular No. 02 3-Apr-14 Shariah Compliant Solutions for Foreign

Bill Discounting
39 IBD Circular Letter No. 01 26-Mar-14 Islamic Banking Windows (IBWs)

38 IBD Circular No. 03 15-Jul-13 Adoption of AAOIFI Shariah Standard No.

17 on ‘Investment Sukuk’

37 IBD Circular No. 01 8-Apr-13 Adoption AAOIFI Shariah Standard No. 12

pertaining to ‘Sharika (Musharaka) and
Modern Corporations’
36 IBD Circular No. 02 8-Apr-13 Shari’ah Standard on ‘Sharikat ul Milk
and Diminishing Musharakah’

35 IBD Circular Letter No. 02 4-Jan-13 Introduction of New Products and

Services

34 IBD Circular Letter No. 01 1-Jan-13 Instructions for Profit and Loss
Distribution and Pool Management for
IBIs’ – Clarifications thereof

33 IBD Circular No. 03 19-Nov-12 Instructions for Profit & Loss Distribution
and Pool Management for Islamic
Banking Institutions

32 IBD Circular No. 02 29-May-12 Accounting Treatment of Credit

Murabaha
31 IBD Circular No. 01 6-Feb-12 Invoice of Murabaha Transactions

30 IBD Circular Letter No. 01 8-Jul-11 Collection of Utility Bills After Due Date
by Islamic Banking Institutions (IBIs)

29 IBD Circular Letter No. 01 6-Dec-10 Presentation of Shariah Compliance

Report to the Board of Directors

28 IBD Circular No. 03 15-Jul-10 Rationalization / Discontinuation of

Returns (Schedule of Service Charges)

27 IBD Circular No. 02 25-Jun-10 Criteria For Conversion of Conventional

Banking Branches into Islamic Banking
Branches
26 IBD Circular No. 01 12-Jan-10 Adoption of Shariah Standards Issued by
Accounting and Auditing Organization for
Islamic Financial Institutions (AAOIFI)

25 IBD Circular Letter No. 02 6-Jun-09 Revision of Capital Adequacy

Requirement (CAR) For IBB(s)

24 IBD Circular Letter No. 01 10-Apr-09 Submission of Returns to IBD-Revision of

MSP

23 IBD Circular No. 01 27-Jan-09 Implementation of Islamic Financial

Accounting Standard for Ijarah (IFAS 2)

22 IBD Circular No. 04 15-Nov-08 Instructions and Guidelines for Shariah

Compliance in Islamic Banking
Institutions
21 IBD Circular No. 03 17-Sep-08 Fit and Proper Criteria for Shariah
Advisors

20 IBD Circular No. 02 25-Mar-08 Instructions and Guidelines For Shariah

Complince in Islamic Banking Institutions

19 IBD Circular Letter No. 01 27-Feb-08 Submission of Information regarding

Sukuk Issued in Pakistan
18 IBD Circular No. 01 2-Jan-08 Risk Management Guidelines for Islamic
Banking Institutions

17 IBD Circular Letter No. 05 29-Nov-07 Declaration of Weightages & Profit

Sharing Ratios

16 IBD Circular No. 6 10-Nov-07 Information about Islamic Banking

Windows

15 IBD Circular Letter No. 04 29-Oct-07 Submission of Returns to Islamic Banking

Department
14 IBD Circular No. 5 10-Sep-07 Guidelines for Islamic Microfinance
Business

13 IBD Circular No. 4 16-Aug-07 Fit & Proper Criteria for Shariah Advisors

12 IBD Circular No. 3 11-Aug-07 Directive Under Section 41 of BCO, 1962

11 IBD Circular Letter No. 03 2-Jul-07 Islamic Financial Accounting Standard-1

Murabaha

10 IBD Circular Letter No. 02 28-May-07 Submission of Returns to Islamic Banking

Department
9 IBD Circular No. 2 20-Mar-07 Fit and Proper Criteria for Shariah
Advisors

8 IBD Circular Letter No. 01 17-Mar-07 Data Based on Annual Audited Accounts

7 IBD Circular No. 1 5-Mar-07 Salient Features of Products and Services

6 IBD Circular Letter No. 1 5-May-06 Submission of Returns to IBD

5 IBD Circular No. 3 26-Oct-04 Fit and proper criteria for Shariah
Advisors
4 IBD Circular Letter No. 1 1-Jun-04 Essentials and Model Agreements for
Islamic Modes of Financing

3 IBD Circular No. 2 29-Apr-04 Minimum Shariah Regulatory Standards

2 IBD Circular No. 1 23-Apr-04 Contact Details of Islamic Banking

Department
1 BPD Circular No. 1 1-Jan-03 Policies For Promotion Of Islamic Banking
Links to main circular & attachments

https://www.sbp.org.pk/ifpd/2023/C1.htm
https://www.sbp.org.pk/ifpd/2023/C1-Annex.pdf

http://www.sbp.org.pk/ibd/2022/C1.htm
https://www.sbp.org.pk/ibd/2022/C1-Annex.pdf

http://www.sbp.org.pk/ibd/2021/C1.htm
https://www.sbp.org.pk/ibd/2021/C1-AnnexA.pdf
http://www.sbp.org.pk/ibd/2021/CL1.htm

https://www.sbp.org.pk/ibd/2020/C4.htm
http://www.sbp.org.pk/ibd/2020/C4-Annex-I.pdf
http://www.sbp.org.pk/ibd/2020/C4-Annex-II.pdf
http://www.sbp.org.pk/ibd/2020/C4-Annex-III.pdf

https://www.sbp.org.pk/ibd/2020/C3.htm
https://www.sbp.org.pk/ibd/2020/C3-Annex-A.pdf

https://www.sbp.org.pk/ibd/2020/C2.htm
https://www.sbp.org.pk/ibd/2020/C2-Annex-I.pdf
https://www.sbp.org.pk/ibd/2020/C2-Annex-II.xlsx
https://www.sbp.org.pk/ibd/2020/CL2.htm
https://www.sbp.org.pk/ibd/2020/CL2-Annex-A.pdf

https://www.sbp.org.pk/ibd/2020/C1.htm
https://www.sbp.org.pk/ibd/2020/C1-Annex-A.pdf

https://www.sbp.org.pk/ibd/2020/CL1.htm

https://www.sbp.org.pk/ibd/2019/C1.htm
https://www.sbp.org.pk/ibd/2019/C1-Annex-A.pdf

https://www.sbp.org.pk/ibd/2018/C2.htm
https://www.sbp.org.pk/ibd/2018/C2-Annex-A.pdf
https://www.sbp.org.pk/ibd/2018/C2-Annex-B.xlsx
https://www.sbp.org.pk/ibd/2018/C1.htm
https://www.sbp.org.pk/ibd/2018/C1-Annex-A.pdf

https://www.sbp.org.pk/ibd/2018/CL1.htm

https://www.sbp.org.pk/ibd/2017/C1.htm
https://www.sbp.org.pk/ibd/2017/C1-Annex.pdf

https://www.sbp.org.pk/ibd/2017/CL1.htm
https://www.sbp.org.pk/ibd/2017/CL1-Annex-A.pdf
http://www.sbp.org.pk/ibd/2016/C1.htm

https://www.sbp.org.pk/ibd/2016/CL1.htm

https://www.sbp.org.pk/ibd/2015/CL1.htm

https://www.sbp.org.pk/ibd/2015/C1.htm
https://www.sbp.org.pk/ibd/2015/C1-Annex.pdf

https://www.sbp.org.pk/ibd/2014/CL3.htm
https://www.sbp.org.pk/ibd/2014/CL3.htm

https://www.sbp.org.pk/ibd/2014/C3.htm
https://www.sbp.org.pk/ibd/2014/C3-Annex.pdf

https://www.sbp.org.pk/ibd/2014/C1.htm

https://www.sbp.org.pk/ibd/2014/C2.htm
https://www.sbp.org.pk/ibd/2014/CL1.htm

https://www.sbp.org.pk/ibd/2013/C3.htm
https://www.sbp.org.pk/ibd/2013/C3-Annex-A.pdf

https://www.sbp.org.pk/ibd/2013/C1.htm
https://www.sbp.org.pk/ibd/2013/C1-Annex-A.pdf
https://www.sbp.org.pk/ibd/2013/C2.htm
https://www.sbp.org.pk/ibd/2013/C2-Annex-A.pdf

https://www.sbp.org.pk/ibd/2013/CL2.htm

https://www.sbp.org.pk/ibd/2013/CL1.htm
https://www.sbp.org.pk/ibd/2013/CL1-Annex.PDF

https://www.sbp.org.pk/ibd/2012/C3.htm
https://www.sbp.org.pk/ibd/2012/C3-Annex.pdf

https://www.sbp.org.pk/ibd/2012/C2.htm
https://www.sbp.org.pk/ibd/2012/C1.htm

https://www.sbp.org.pk/ibd/2011/CL1.htm

https://www.sbp.org.pk/ibd/2010/CL1.htm

https://www.sbp.org.pk/ibd/2010/C3.htm

https://www.sbp.org.pk/ibd/2010/C2.htm
https://www.sbp.org.pk/ibd/2010/C2-Anexx.pdf
https://www.sbp.org.pk/ibd/2010/C1.htm
https://www.sbp.org.pk/ibd/2010/C1-Appendix.pdf

https://www.sbp.org.pk/ibd/2009/CL2.htm

https://www.sbp.org.pk/ibd/2009/CL1.htm
https://www.sbp.org.pk/ibd/2009/Annex-CL1.xls

https://www.sbp.org.pk/ibd/2009/C1.htm

https://www.sbp.org.pk/ibd/2008/C4.htm
https://www.sbp.org.pk/ibd/2008/C3.htm

https://www.sbp.org.pk/ibd/2008/C2.htm

https://www.sbp.org.pk/ibd/2008/Annex-c2-1.pdf
https://www.sbp.org.pk/ibd/2008/Annex-c2-2.pdf

https://www.sbp.org.pk/ibd/2008/CL1.htm
https://www.sbp.org.pk/ibd/2008/Annex-cl1.pdf
https://www.sbp.org.pk/ibd/2008/C1.htm
https://www.sbp.org.pk/ibd/2008/Annex-c1.pdf

https://www.sbp.org.pk/ibd/2007/CL5.htm

https://www.sbp.org.pk/ibd/2007/C6.htm
https://www.sbp.org.pk/ibd/2007/Annex-C6.pdf

https://www.sbp.org.pk/ibd/2007/CL4.htm
https://www.sbp.org.pk/ibd/2007/C5.htm
https://www.sbp.org.pk/ibd/2007/Annex-c5.pdf

https://www.sbp.org.pk/ibd/2007/C4.htm

https://www.sbp.org.pk/ibd/2007/C3.htm

https://www.sbp.org.pk/ibd/2007/CL3.htm

https://www.sbp.org.pk/ibd/2007/CL2.htm
https://www.sbp.org.pk/ibd/2007/Annex-IBD-Circular-Letter-No-2-MSP.xls
https://www.sbp.org.pk/ibd/2007/Annex-IBD-Circular-Letter-No-2-WSP.xls
https://www.sbp.org.pk/ibd/2007/C2.htm
https://www.sbp.org.pk/ibd/2007/C2_FP_Criteria.pdf
https://www.sbp.org.pk/ibd/2007/C2_SAP_Form.pdf
https://www.sbp.org.pk/ibd/2007/C2_Annex.pdf

https://www.sbp.org.pk/ibd/2007/CL1.htm
https://www.sbp.org.pk/ibd/2007/Annex-IBD-Circular-Letter-No-1.xls

https://www.sbp.org.pk/ibd/2007/C1.htm
https://www.sbp.org.pk/ibd/2007/Annex-IBD-Circular-No-1.pdf

https://www.sbp.org.pk/ibd/2006/CL1.htm

https://www.sbp.org.pk/ibd/2004/cir03.htm
https://www.sbp.org.pk/ibd/2004/CIR03-Annexure-IV.pdf
https://www.sbp.org.pk/ibd/2004/CIR03-FORM-SAP.pdf
https://www.sbp.org.pk/ibd/2004/CL01.htm

https://www.sbp.org.pk/ibd/2004/cir02.htm
https://www.sbp.org.pk/ibd/2004/Setting-up%20of%20IB%20Annex%20I.pdf
https://www.sbp.org.pk/ibd/2004/Setting-up%20of%20IB%20Subsidiary%20Annex%20II.pdf
https://www.sbp.org.pk/ibd/2004/Branch%20Opening%20Guidelines%20Annex%20III.pdf
https://www.sbp.org.pk/ibd/2004/F%20&%20P%20Test%20for%20SA.pdf
https://www.sbp.org.pk/ibd/2004/App%20Form%20A.pdf

https://www.sbp.org.pk/ibd/2004/cir-01.htm
https://www.sbp.org.pk/bpd/2003/C1.htm
https://www.sbp.org.pk/bpd/2003/annexC1_I.pdf
https://www.sbp.org.pk/bpd/2003/annexC1_II.pdf
https://www.sbp.org.pk/bpd/2003/annexC1_III.pdf
https://www.sbp.org.pk/bpd/2003/annexC1_annexA.pdf
https://www.sbp.org.pk/bpd/2003/annexC1_formA.pdf
https://www.sbp.org.pk/bpd/2003/annexC1_annex_formA.pdf
Text of main circular

Adoption of ‘Accounting and Auditing Organization for Islamic Financial Institutions’ (AAOIFI) Shariah Standards
With a view to further strengthen Shariah compliance framework and harmonize the Shariah practices in Islamic banking industry, the AAOIFI Shariah Stan
(Mortgage and its Contemporary Applications) and No. 46 (Al-Wakalah Bi Al-Istithmar (Investment Agency)) have been adopted with immediate effect sub
as given in the attached Appendix - A.
2. The adoption of the Standards is in addition to current regulations, other instructions and directives issued by SBP from time to time.
3. The failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.
Please acknowledge receipt.
Encl: Appendix - A

Adoption of ‘Accounting and Auditing Organization for Islamic Financial Institutions’ (AAOIFI) Shariah Standards
With a view to further strengthen Shariah compliance framework and harmonize the Shariah practices in Islamic banking industry, the AAOIFI Shariah Stan
Salam), No. 11 (Istisna'a and Parallel Istisna'a), No. 25 (Combination of Contracts) and No. 50 (Irrigation Partnership (Musaqat)) have been adopted with im
clarifications/amendments as given in the attached Appendix - A.
The adoption of the Standards is in addition to current regulations, other instructions and directives issued by SBP from time to time.
The failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.
Please acknowledge receipt.
Encl: Appendix - A

Shari'ah Non-Compliance Risk Management

Please refer to IBD Circular No.1 of 2008 on Risk Management Guidelines for Islamic Banking Institutions (IBIs), which provides a set of principles of best pr
implementing effective risk management in IBIs. At present, it has been noted that there is a lack of uniform practices across the Islamic banking industry r
Non-Compliance Risk (SNCR). On the other hand, increasing size of the industry, nature of its operations, and diversified portfolio of products & services ne
their focus on management of SNCR.
2. With a view to reinforce the best SNCR management practices, it has been emphasized that SNCR management shall be an essential element of an IBI’s
framework. In this respect, followings instructions are being issued:
i. Board of Directors (BoD) of an IBI shall approve and ensure existence of SNCR management as a part of overall risk management framework in line with
business activities and operations.
ii. Senior management shall ensure implementation of the SNCR management framework.
iii. BoD or any of its designated sub-committee, responsible for risk management shall also be responsible for monitoring of SNCR in order to keep an eye o
level. Further, the senior management or its existing risk management committee shall also be responsible for close monitoring of SNCR at operational/ma
iv. Necessary steps should be taken to ensure that relevant members of BoD/senior management should possess requisite knowledge and understanding o
v. SBP’s instructions regarding the Shari’ah rules & principles, including Shari’ah standards and decisions, rulings, fatawa of the Shari’ah Board of an IBI ma
identification of SNCR and controls in different products, services and business activities. However, identification of SNCR may not be limited to these sour
the observations and discrepancies highlighted by an IBI’s Shari’ah Compliance Department (SCD), Internal Shari’ah Audit Unit (ISAU), external Shari’ah au
also be used for identification of weaknesses in different business activities and operations with respect to SNCR.
vi. IBIs shall delineate the appropriate reporting mechanism, including frequency, thresholds/limits for reporting of SNCR events and transactions to the Bo
management committee of senior management.
vii. IBIs shall maintain a proper database of all (a) actual losses, (b) potential losses due to Shari’ah non-compliant events/transactions and (c) cases which
non-compliant and subsequently rectified/recognized. Actual and potential losses have been defined in Annexure-A.
viii. IBIs shall submit details of actual losses incurred due to Shari’ah non-compliant events/transactions to the IBD, SBP on a quarterly basis, within 15 day
ibd.reporting@sbp.org.pk. Reporting format is given in Annexure-A.
3. All IBIs are advised to align their existing risk management framework with these instructions by September 30, 2021.
4. Please acknowledge the receipt.
Encl: Annexure-A
Shari’ah Governance Framework (SGF) for Islamic Banking Institutions (IBIs)
Please refer to Para 3A(v) of IBD Circular No. 01 of 2018 dated June 07, 2018 on the captioned subject.
2. In this regard, existing Para 3A(v) stands replaced with following:
“The SB members, except RSBM, may serve on the SBs of up to three IBIs in Pakistan. However, the IBI must ensure that its SB has at least 2 members (oth
SB of any other IBI. Hence, each IBI will have at least three unique members in SB including RSBM.”
3. The above revision shall be effective from 1st July, 2021. However, IBIs are encouraged to initiate the process of realignment of their SBs as per the abo
4. All other instructions on the subject shall remain unchanged.
5. Please acknowledge receipt.

Guidelines and Criteria for Establishing Islamic Banking Institutions (IBIs) and Commencement of Shariah Compliant Business and Operations by Developm
Please refer to IBD Circular No. 2 dated 29th April, 2004 wherein the guidelines and criteria for establishing Islamic banking institutions have been prescrib
2. Subsequently, various developments have taken place in the licensing and regulatory regime for the conventional and Islamic banking institutions (i.e. fu
banking subsidiary and Islamic branches of conventional banks).The abovementioned circular has accordingly been updated and the revised instructions in
criteria covering the following areas are being issued to facilitate the existing conventional banks, DFIs, IBIs and the potential new entrants.
i. Guidelines & criteria for setting up full-fledged Islamic commercial bank (Annexure-I).
ii. Guidelines & criteria for setting up of an Islamic banking subsidiary by the existing conventional commercial bank (Annexure-II).
iii. Guidelines & Criteria for:
a. Opening of standalone Islamic banking branches (IBBs) by a conventional commercial bank (Annexure-III).
b. Commencement of Shariah Compliant Business and Operations by a DFI (Annexure-III).
3. These guidelines and criteria shall be applicable with immediate effect and shall supersede the instructions issued vide IBD Circular No. 2 dated 29th Ap
4. Please acknowledge receipt.
Encl:
Annexure-I
Annexure-II
Annexure-III (along with its Appendix-A & Appendix-B)

Adoption of 'Accounting and Auditing Organization for Islamic Financial Institutions' (AAOIFI) Shariah Standard(s)
With a view to further strengthen Shariah compliance framework and harmonize the Shariah practices in Islamic banking industry, the AAOIFI Shariah Stan
Bilateral Promise (SS – 49) has been adopted with immediate effect subject to clarifications/amendments as given in the attached Appendix – A.
The adoption of the Standards is in addition to current regulations, other instructions and directives issued by SBP from time to time.
The failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.
Please acknowledge receipt.
Encl: Appendix - A

Revised Instructions on Islamic Banking Windows (IBWs) Operations

With a view to increase the share and outreach of Islamic banking in the country, existing scope of operations of IBWs is being enhanced.
2. In this context, it has been decided to allow IBWs to offer all types of Shariah compliant financing products. All conventional banks already having IBWs
‘IBWs Policy’ to Islamic Banking Department, State Bank of Pakistan as per instructions given in Annexure-I within three months of issuance of this circular
operations shall submit duly approved ‘IBWs Policy’ at least one month prior to the deadline set under Para D (iii) of Annexure-I for submission of consolid
Conversion/Expansion plan.
3. All IBBs operating IBWs shall submit quarterly data using the attached template (Annexure-II).
4. This Circular supersedes all existing instructions on operations of IBWs, issued by Islamic Banking Department, State Bank of Pakistan.
5. The said instructions shall become effective immediately. Any non-compliance with provisions of the revised instructions shall render the bank liable for
provisions of Banking Companies Ordinance, 1962.
6. Please acknowledge receipt.
Encl:
Annexure-I: Revised Instructions on IBWs Operations
Annexure-II: Reporting Format
Guidelines for Implementation of Regulatory Relief to Dampen the Effects of COVID-19
In order to dampen the adverse effects of COVID-19 and to enable the banks/DFIs continue to fulfill their role in funding the real economy, the State Bank
regulatory relief on March 26, 2020 by revising the prudential regulations for corporate/commercial banking, consumer financing, agriculture financing, m
housing finance.
2. With a view to facilitate the customers of IBIs and smooth implementation of relaxation provided in respective prudential regulations related to deferm
rescheduling/restructuring of financing facilities, following has been decided:
While deferring the principal amount or rescheduling/restructuring of different Islamic financing products, IBIs may refer to Appendix-A for major mode w
Appendix-A may not necessarily cover all products offered by IBIs. Therefore, IBIs may reschedule/ restructure such Islamic financing products as per their
IBIs shall ensure that all products/arrangements/documents/agreements, etc. for the above mentioned at point (i) and (ii) are approved by their respectiv
3. All other instructions on the matter shall be applicable mutatis mutandis on the IBIs.
4. Please acknowledge the receipt.
Encl: Appendix-A

Adoption of 'Accounting and Auditing Organization for Islamic Financial Institutions' (AAOIFI) Shariah Standards
With a view to further strengthen Shariah compliance framework and harmonize the Shariah practices in Islamic banking industry, the AAOIFI Shariah Stan
(Agency and the Act of an Uncommissioned Agent (Fodooli)), and No. 28 (Banking Services in Islamic Banks) have been adopted with immediate effect sub
as given in the attached Appendix – A. .
The adoption of the Standards is in addition to current regulations, other instructions and directives issued by SBP from time to time.
The failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.
Please acknowledge receipt.
Encl: Appendix - A

Enhanced Training & Capacity Building Measures for Islamic Banking Institutions (IBIs)
Please refer to clause No-12 of Annexure-I notified vide IBD Circular No. 02 of 2018 dated June 29, 2018.
2. In this connection, it is advised that the clause-12 given in aforesaid Annexure-I is amended and be read as under:
For the staff, designated/transferred/posted at any new/existing Islamic branch/Window or any conventional branch being converted into an Islamic bran
time training session of minimum 5 days (40 hours) on Islamic banking and a refresher of minimum 3 days (24 hours) per year in addition to other soft skill
and development policy.
3. Further, for a program to qualify as training on Islamic banking, it must be learning intensive and may include in-house programs, external classroom ses
awareness sessions, and e-learning courses.
4. Other instructions on the subject shall however remain unchanged.
5. Please acknowledge receipt.

Adoption of 'Accounting and Auditing Organization for Islamic Financial Institutions' (AAOIFI) Shariah Standards
With a view to further strengthen Shariah compliance framework and harmonize the Shariah practices in Islamic banking industry, the AAOIFI Shariah Stan
Card and Credit Card), No. 5 (Guarantees), No. 14 (Documentary Credit), No. 18 (Possession (Qabd)), No. 24 (Syndicated Financing) and No. 38 (Online Fina
with immediate effect subject to clarifications/amendments as given in the attached Appendix – A.
The adoption of the Standards is in addition to current regulations, other instructions and directives issued by SBP from time to time and is not replacing th
The failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.
Please acknowledge receipt.
Encl: Appendix - A

Enhanced Training & Capacity Building Measures for Islamic Banking Institutions (IBIs)
In order to encourage IBIs to create a culture of continuous learning for development of knowledge and capacity in Islamic banking industry, IBIs are advise
measures for training and capacity building as per Annexure – I.
2. IBIs shall ensure to maintain, update and enhance the knowledge, skills and capabilities of their employees/staff at strategic, functional and operational
measures will result in higher quality of service delivery and greater awareness of Islamic banking among existing and potential customers.
3. Further, IBIs are advised to maintain record of training and capacity building measures on the prescribed format as per Annexure-II, duly approved by th
monthly basis, effective from July 2018. The same shall be made available for audit purpose and to SBP inspection team during the course of inspection.
4. All other instructions on the subject, issued from time to time, shall remain unchanged.
5. Kindly acknowledge receipt
Encl:
Annexure I
Data Format (Excel) – Annexure II
Shari’ah Governance Framework (SGF) for Islamic Banking Institutions (IBIs)
Please refer to IBD Circular No. 1 of 2015 wherein ‘Shari’ah Governance Framework for Islamic banking institutions (IBIs) was notified. The framework was
01, 2015.
2. In view of the industry practices and considering the feedback received from various quarters, the Framework has been further refined and is being is
Further, IBD Circular Letter No.1 of 2016 and IBD Circular Letter No.1 of 2017, have been made part of the revised Framework, therefore, both the circular
Framework shall come into force with immediate effect. The IBIs are advised to make all the necessary arrangements to comply with the requirements of
compliance status to IBD-SBP by July 31, 2018.
3. Any non-compliance with provisions of the Framework will render the bank liable for penal action under the provisions of Banking Companies Ordinan
4. Please acknowledge receipt.
Encl: Shari’ah Governance Framework for IBIs

Change in nomenclature of ‘SBP Shariah Board’ to ‘Shariah Advisory Committee’

It is informed that the ‘Shariah Board of State Bank of Pakistan’ (SBP) has been renamed as ‘Shariah Advisory Committee’ (SAC) with immediate effect. The
Shariah Board as used in all SBP communications including Circulars, Circular Letters, Regulations and Guidelines may be read as ‘Shariah Advisory Committ
Please acknowledge receipt.

Guidelines for Conversion of a Conventional Bank into an Islamic Bank

In order to promote Islamic banking and facilitate banks desirous of converting their entire banking operations from conventional to Islamic, State Bank of
detailed guidelines for conversion of a conventional bank into an Islamic bank.
2. The guidelines include eligibility criteria, necessary measures and the process of conversion comprising three stages i.e. i) In-principle approval to start c
of existing conventional banking branches into Islamic banking branches and iii) Issuance of full-fledged Islamic Bank license.
3. Banks intending to convert their operations from conventional to Islamic shall submit a detailed application as per enclosed guidelines to Banking Policy
(BPRD), SBP and a copy for information to Islamic Banking Department (IBD), SBP.
4. Kindly acknowledge receipt.
Encl: Guidelines for Conversion of a Conventional Bank into an Islamic Bank

External Shari’ah Audit Report (Para 7) - Shari’ah Governance Framework for Islamic Banking Institutions (IBIs)
Please refer to para 7 of ‘Shari’ah Governance Framework (SGF) for IBIs’ regarding External Shari’ah Audit notified vide IBD Circular No. 1 of 2015 dated Ap
instructions issued vide IBD Circular No.3 of 2012.
2. Based on detailed deliberations and feedback received from various stakeholders, following instructions on the subject are being issued:
i. Shari’ah Board members of IBIs shall not be allowed to be engaged with any external audit firms.
ii. It will be the responsibility of the external Audit firms to take measures for capacity building of their staff for conducting Shari’ah audit and provide them
Moreover, external Audit firms shall prescribe a Fit and Proper Criteria (FAPC) for Shari’ah scholars to be engaged for external Shari’ah audit of IBIs. In this
members as defined in SGF may be used as a guiding principle for engagement of Shari’ah auditor.
iii. External Audit shall also include review and provide opinion on bank’s pool management practices & IT based system; specially computation and distrib
depositors, tagging and movement of assets and allocation of income & expenses, etc.
iv. Shari’ah Compliance Department of the IBI shall be responsible to verify distribution of profit and loss to the depositors prior to its disbursement where
of the IBI shall conduct a post disbursement audit on quarterly basis. The report of internal Shari’ah audit on profit and loss distribution shall be submitted
Consequently, the regulatory instructions for joint verification of the distribution of profit and loss to the depositors by Shari’ah Advisor and External Audit
2012 stands withdrawn.
v. The format of external Shari’ah audit report for submission to Board of Directors (BOD) of an IBI and to State Bank of Pakistan (SBP) is enclosed as Annex
vi. Institute of Chartered Accountants of Pakistan (ICAP) may develop comprehensive guidelines to conduct external Shari’ah Audit in consultation with ex
vii. Considering the capacity building issues of external audit firms and scarcity of experienced Shari’ah scholars in the industry, the requirement of an exte
exempted for the calendar year 2015. However, the IBIs which had already engaged external auditor to conduct Shari’ah audit for the year ending Decemb
assessment and submit a copy of their external Shari’ah audit report to IBD-SBP.
viii. A copy of external Shari’ah audit report shall be submitted to IBD-SBP within 45 days of the date of finalization of IBIs Audited Accounts. However, kee
external Audit firms the condition has been relaxed for the year ended December 2016; the IBI’s shall submit copy of external Shari’ah audit report to IBD-
than June 30, 2017. The IBIs shall not publish the External Shari’ah Audit report till further instructions.
3. Other instructions on the subject shall however remain unchanged. Any failure to comply with these instructions will render the bank liable for penal ac
Banking Companies Ordinance, 1962.
4. Please acknowledge receipt.
Annexure - A
Exemption from KIBOR as Benchmark rate for Participatory and Wakalah Modes Based Products
Please refer to BPD Circular No. 1 of 2004 dated 21st January 2004 as amended from time to time wherein all banks have been advised to use KIBOR as be
exemptions have been given from this requirement vide Para 3 of the said circular.
2. In this regard, it has been decided that the financing provided on the basis of participatory (Musharakah & Mudarabah) and Wakalah (Agency) modes by
(IBIs) shall also be exempted from the requirement of using KIBOR as benchmark rate.
3. IBIs desirous of availing this exemption shall ensure the following conditions:
** IBIs shall take adequate measures as per Risk Management Guidelines for Islamic Banking Institutions issued vide IBD Circular No. 1 of 2008 particularly
in participatory mode based products.
** For Mudarabah and Musharakah based products, IBIs shall ensure compliance with minimum Shariah requirements issued vide IBD Circular No.02 of 20
No.12 as adopted vide IBD Circular No.01 of 2013 and AAOIFI Shariah Standard No.13 as adopted vide IBD Circular No.01 of 2010.
** For Wakalah based products, IBIs should use Arabic version of AAOIFI Shariah Standard No. 23 on Agency as guideline in consultation with their Shariah
** IBIs shall submit the details of Mudarabah, Musharakah and Wakalah based products (new/revised) for delinking with KIBOR benchmark to Islamic Ban
Circular Letter No.02 of 2013 in the prescribed manner. The submissions shall also include:
* detailed mechanism for pricing under these modes with proper policies for risk mitigation;
* amendments in agreements and related documents;
* approval of IBI’s product by their Shariah Board;
* criteria for selection of firms/companies with whom IBIs can execute Musharakah or Mudarabah contract.
** IBIs shall comply with all other regulatory and Shariah related instructions issued by SBP from time to time.
4. The above instructions shall be applicable with immediate effect. All other instructions on the subject shall remain the same.
5. Please acknowledge receipt.

Report of Shari’ah Board – Para 3(E) of Shariah Governance Framework

In terms of Para 3(E) of Shariah Governance Framework (SGF) for Islamic Banking Institutions (IBIs) notified vide IBD Circular No. 1 of 2015, it has been pre
an IBI shall prepare a report on the IBI’s Shari’ah compliance environment and conditions, which shall be published in the IBI’s annual report.
2. In order to enhance understanding about the report of Shariah Board and for a better public disclosure, it is advised that with effect from December 31,
Urdu translation of their Shariah Board’s report in their annual report.
3. Other instructions contained in the said Framework shall remain unchanged.
4. Please acknowledge receipt.

Shariah Compliant Solutions for Foreign Bill Discounting

Please refer to IBD Circular No. 2 of 2014 dated April 03, 2014 read with IBD Circular Letter No. 2 of 2014 dated April 14, 2014 wherein instructions on the
2. In this regard, the prescribed minimum limit of normal ready transactions referred in clause 2 of IBD Circular Letter No. 2 of 2014 dated April 14, 2014, h
to USD 25,000 or equivalent in other foreign currencies with immediate effect.
3. Other instructions contained in the said circular and circular letter shall remain the same.
4. Please acknowledge receipt.

Shari’ah Governance Framework for Islamic Banking Institutions (IBIs)

Please refer to IBD Circular No. 3 of 2014 wherein ‘Shari’ah Governance Framework for Islamic banking institutions (IBIs) was notified. As the Framework w
the implementation of the same was deferred vide IBD Circular Letter No. 3 of 2014.
2. In view of the feedback received from various quarters and deliberations of SBP Shariah Board, the Framework has been further refined and is being issu
Framework shall come into force w.e.f. July 01, 2015. The IBIs are advised to make all the necessary arrangements to comply with the requirements of the
timelines. Accordingly, IBD Circular No. 3 of 2014 is hereby superseded.
3. Further, Section A, B, C and D of Annexure-1 and Section I and II of Annexure-2 to IBD Circular No. 2 of 2008, pertaining to ‘Instructions for Shariah Comp
Compliance’ respectively, would stand replaced with instructions contained in the subject Framework. Moreover, as ‘Fit and Proper Criteria (FAPC)’ for the
Board of an IBI is made part of the Framework, therefore IBD Circular No. 2 of 2007 as amended from time to time is hereby withdrawn. Furthermore, the
in IBD Circular Letter No. 1 of 2010 are superseded through Para 1(iv) and Para 3(E) of the subject Framework.
4. Please note that any non-compliance with provisions of Shariah Governance Framework will render the bank liable for penal action under the provisions
1962.
5. Please acknowledge receipt.
Encl: Shari’ah Governance Framework for IBIs

Shariah Governance Framework for Islamic Banking Institutions (IBIs)

Please refer to IBD Circular No. 3 of 2014 dated April 4, 2014 regarding ‘Shariah Governance Framework for IBIs.
2. Based on feedback and with a view to ensure smooth implementation of the framework that IBIs may put in place necessary structure of the framewor
its implementation date from October 01, 2014 to January 01, 2015. Accordingly, IBIs are advised to expedite the implementation process within extended
Please acknowledge receipt.
Shariah Compliant Solutions for Foreign Bill Discounting
Please refer to IBD Circular No. 2 of 2014 dated April 03, 2014 wherein necessary instructions on the subject were issued.
2. In this regard, clause 1(i) of the aforesaid circular is revised and replaced with the following clause with immediate effect:
“The Salam of foreign currency is not a preferred transaction, however if some IBIs are interested in doing this transaction, the same shall be executed at t
purpose of such transactions, the market rate shall mean the exchange rate used to carry out normal ready transactions of at least USD 50,000 or more by
the IBI’s Shariah Advisor (Shariah Boards from 1st Oct. 2014) shall ensure, through regular reviews that the exchange rate(s) applied in currency Salam tran
different in any material way from the exchange rate(s) applied for ready transactions of USD 50,000 or more executed by the IBI during that day.”
3. The other instructions contained in the said circular shall remain the same.
4. Please acknowledge receipt.

Shari’ah Governance Framework for Islamic Banking Institutions (IBIs)

Please refer to IBD Circular No. 2 of 2008 wherein the Instructions and Guidelines for Shari’ah compliance were issued for Islamic banking institutions.
2. Keeping in view the developments taken place in the Islamic banking industry over the recent years, some of the instructions and guidelines have been
Shari’ah Governance Framework is being issued. The primary objective of the framework is to further strengthen the overall Shari’ah compliance environm
3. The framework (copy enclosed) explicitly defines the roles and responsibilities of various organs of IBI including the Board of Directors (BOD), Executive
Shari’ah Compliance Department and Internal and External auditors towards Shari’ah compliance.
4. Accordingly the Sections A, B, C & D of Annexure-1 (Instructions) and Section I & II of Annexure-2 (Guidelines) of IBD Circular No. 2 of 2008 shall stand re
framework whereas all other instructions contained in the said Circular shall remain the same.
5. The framework shall be applicable to all IBIs including Islamic banking branches of conventional banks w.e.f. 1st October 2014. The IBIs are advised to m
arrangements to comply with the requirements of the framework within given timelines.
Please acknowledge receipt.
Encl: Shari’ah Governance Framework for IBIs

Free-of-cost Priority Banking Services

In order to harmonize the Shariah practices of Islamic banking institutions (IBIs) regarding provision of free-of-cost priority banking services to their clients
issued which will be applicable with immediate effect:-
i. Priority banking services can be provided to both current and saving account holders; however, offering the same to current account holders only is not p
ii. Promotional material/activities of IBIs shall explicitly mention that such free-of-cost priority banking services are offered at bank’s sole discretion and to
holders.
iii. IBIs may prescribe the condition of maintaining a certain level of minimum balance to avail priority banking services.
2. The IBIs are advised to ensure compliance with the instructions in letter and spirit. Failure to comply with the same may invoke penal action under the
Ordinance, 1962.
3. Please acknowledge receipt.

Shariah Compliant Solutions for Foreign Bill Discounting

In order to standardize Shariah practices of Islamic banking institutions (IBIs) regarding foreign bill discounting, the following instructions are issued which
effect:-
i. Salam of foreign currency is not a preferred transaction; however if any IBI is interested in undertaking such transaction, the same shall be executed at ‘t
previous day’s transactions’ executed by the IBI with its clients.
ii. In case ‘Qard-e-Hasanah cum Wakalah’ model is used for bill discounting, it shall be ensured that the agency fee charged for collecting the proceeds of t
(market fee)’ and shall not be linked to the bill amount and the tenor etc.
iii IBIs may also use Murabaha, Musawama, Salam and Istisna-cum-Wakalah etc to meet financing needs of their customers independent of foreign bill.
2. The IBIs are advised to ensure compliance with the instructions in letter and spirit. Failure to comply with the same may invoke penal action under the p
Ordinance, 1962.
3. Please acknowledge receipt.
Islamic Banking Windows (IBWs)
Please refer to IBD Circular No. 6 of 2007 read with Para 10 (v) of Annexure III of IBD Circular No. 2 of 2004, which requires the banks having Islamic bankin
information before the start of Islamic banking windows operations at their conventional banking branches.
2. In order to further strengthen the Islamic banking windows (IBWs) operations, the following additions/amendments have been made in the earlier instr
i) Before opening of each IBW, bank shall obtain prior written approval from Banking Policy and Regulation Department (BPRD) of SBP.
ii) A non-refundable processing fee of Rs 50,000/- per IBW shall be paid by the bank along with their request for permission to open IBW(s).
iii) In addition to processing fee, Annual fee @ Rs 25,000/- per IBW shall also be applicable on IBWs operating in conventional banking branches of big citie
Policy issued vide BPRD Circular No. 15 of 2007 as amended from time to time. No annual fee shall be applicable for IBWs operating in other than big cities
iv) IBW(s) may be closed without prior approval of SBP. In case of closure of IBW(s), bank would inform SBP before or within seven working days of closure
list/position of IBWs and the reason for closure of IBW(s).
v) IBWs may also be shifted to other branches with prior written approval from BPRD of SBP. No processing fee shall however be applicable for shifting of I
vi) Before applying for permission, the bank shall ensure that the designated Staff, Operation Manager and the Branch Manager of the branch where IBW
marketing staff have been provided comprehensive Islamic Banking training, so that they are not only able to understand the key differences between con
products but are also be able to respond effectively to the queries regarding various Islamic Banking modes/products and services.
vii) The bank shall submit their request for opening or shifting of IBW(s) to the Director – BPRD with a copy to Director – Islamic Banking Department along
following information:
a) Number of Islamic Banking Branches of Islamic Banking Institutions operative in the vicinity i.e. within the radius of 1 Km.
b) Details about Staff/HR arrangements for proposed IBWs; dedicated IB Staff or mixed staff.
c) Marketing arrangements; separate marketing staff or mixed marketing (please explain and specify).
d) Details about physical infrastructure for IBW in the branch, if any, like separate counters for walk-in clients.
e) Contact details of the proposed Branch/officials.
f) A report containing the details of Islamic banking training provided to the staff of the proposed branches including the contents/structure, schedule and
g) Shariah Advisor’s opinion regarding the HR capacity and the overall system/arrangements for the proposed IBW(s).
3. The above instructions are applicable with immediate effect. All new IBWs shall require prior written approval of SBP along with processing fee. The ann
shall be paid by 7th January each year starting from the year 2015. The processing and annual fee can be paid either through the bank’s authority letter du
signatory for debiting their current account maintained with SBP BSC (Bank) or through cheque in the favour of State Bank of Pakistan. The authority letter
Director, BPRD of SBP.
4. All other instructions contained in IBD Circular No. 6 of 2007 and IBD Circular No. 2 of 2004 shall remain the same.
Please acknowledge receipt.

Adoption of AAOIFI Shariah Standard No. 17 on ‘Investment Sukuk’

In continuation of our efforts to strengthen Shariah compliance framework and harmonize the Shariah practices in Islamic banking industry, the AAOIFI Sh
‘Investment Sukuk’ has been adopted with immediate effect subject to clarifications/amendments annexed herewith.
2. The adoption of the Standard is in addition to current Regulations and other instructions and directives issued by SBP from time to time and is not replac
3. The failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.
Please acknowledge receipt.
Encl: Annexure

Adoption of AAOIFI Shariah Standard No. 12 pertaining to ‘Sharika (Musharaka) and Modern Corporations’
Please refer to Para 5 of Appendix-A to Annexure-1 of IBD Circular No. 2 of 2008 wherein essentials for carrying out ‘Musharaka’ were prescribed as ‘minim
compliance for Islamic Banking institutions (IBIs). To further strengthen the Shariah compliance framework and to harmonize the Shariah practices in Islam
Shariah Standard No. 12 related to ‘Sharika (Musharaka) and Modern Corporations’ is adopted w.e.f July 01, 2013 subject to clarifications/amendments an
2. It may be noted that adoption of the Standard is in addition to current Prudential Regulations, guidelines and other circulars and directives issued by SBP
replacing them by any means.
3. The IBIs shall ensure that all Sharika (Musharakah) facilities to be offered from 1st July 2013 are in conformity with the aforesaid AAOIFI Standard. The f
instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.
Please acknowledge receipt.
Encl: Annexure
Shari’ah Standard on ‘Sharikat ul Milk and Diminishing Musharakah’
Please refer to Para 8 of Appendix-A to Annexure-1 of IBD Circular No. 2 of 2008 wherein essentials for carrying out ‘Diminishing Musharaka’ are prescribe
Shariah compliance for Islamic Banking institutions (IBIs). To further strengthen the Shariah compliance framework and to harmonize the Shariah practices
Shariah Standard on ‘Sharikat ul Milk and Diminishing Musharakah’ is issued and annexed herewith. The same shall be applicable w.e.f July 01, 2013.
2. It may be noted that the Standard is in addition to current Prudential Regulations, guidelines and other circulars and directives issued by SBP from time
by any means.
3. The IBIs shall ensure that all facilities to be offered on the basis of ‘Sharikat ul Milk and Diminishing Musharakah’ from 1st July 2013 are in conformity w
failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.
Please acknowledge receipt.
Encl: Annexure

Introduction of New Products and Services

Please refer to para H of Annexure 1 to IBD Circular No. 2 of 2008 wherein Islamic Banking Institutions (IBIs) are required to submit the salient features of
from their Shariah Advisor to this department before the launch of new products and services.
2. Henceforth, all such submissions ie the salient features, product structure, process flow and underlying agreement(s) of the products and services along
Advisor shall be made to this department at least 30 days before the proposed launch of new products and/or services.
3. Other instructions as contained in the circular shall however remain unchanged.
Please acknowledge receipt.

‘Instructions for Profit and Loss Distribution and Pool Management for IBIs’ – Clarifications thereof
Please refer to ‘Instructions for Profit & Loss Distribution and Pool Management for Islamic Banking Institutions (IBIs)’ issued vide IBD Circular No. 3 of 201
2. To address the comprehension and practical issues regarding some of the clauses of the Instructions, the following clarifications are issued:
i. Clause 1.10: The transaction record mentioned in the clause shall interalia include ‘memorandum’ as given in para 1.2.
ii. Clause 3.2: The average balance in this clause means average daily balance (daily product).
iii. Clause 4.1.2: The PSR cap prescribed in the clause shall not be applicable on FCY deposits.
iv. Clause 4.2.4: The last sentence of this clause is replaced with the following:
“In case of early/premature encashment of TDR, the applicable weightage on such TDR shall be that of the TDR of the nearest completed tenor. For instan
one year shall be assigned the weightage applicable on one year TDR”.
v. Clause 5.3: The special or individual Hiba for calendar year (CY) 2013 shall be capped at 50% of CY 2012 level in absolute terms and for CY 2014 at 25% o
Hiba shall be permissible from January 2015 onward.
vi. Appendix-I – Process flow: The deduction/utilization of PER shall only be at the level of Net Income of the pool. The revised process flow is enclosed at A
3. Other instructions as contained in the circular shall however remain unchanged.
Please acknowledge receipt.
Encl: Appendix-I

Instructions for Profit & Loss Distribution and Pool Management for Islamic Banking Institutions
In order to improve transparency and disclosures and bring standardization in Islamic banking institutions’ (IBIs) profit and loss distribution policies and pra
detailed Instructions for Profit & Loss Distribution and Pool Management in IBIs. These instructions are applicable with immediate effect.
2. With the issuance of these instructions, Para IV of annexure-II of IBD Circular No. 2 of 2008 stands withdrawn. Further, the provisions of BPRD Circular N
rate of return on savings deposits as amended from time to time shall no more be applicable on Islamic banking institutions.
3. Failure to comply with the enclosed Instructions shall invoke penal action under the provisions of Banking Companies Ordinance, 1962.
Please acknowledge receipt.
Encl. Instructions for Profit & Loss Distribution

Accounting Treatment of Credit Murabaha

Please refer to Appendix A(1) of Annexure-1 of IBD Circular No. 2 of 2008 wherein Murabaha is an approved mode of finance for Islamic Banking Institutio
2) Unlike normal Murabaha transactions wherein IBIs purchase the goods on cash and sell the same on credit, under credit Murabaha transactions, the IBI
on credit as the suppliers allow credit for a certain period on the sale of goods. While normal Murabaha transactions are recorded and reported as per IFA
reporting of credit Murabaha transactions is not standardized across the industry. Therefore, in order to bring standardization in recording and reporting o
the following instructions are being issued which are in line with the spirit of IFAS-1:
i. The cases wherein IBI purchases the goods on supplier’s credit and sells the same on credit under Murabaha, the transaction shall be booked as on-balan
recording ‘Payable to supplier’ and ‘Receivable from customers against Murabaha’ for the said credit purchase and credit sale respectively.
ii. The CRR/SLR and capital adequacy requirements on the said liability and financing respectively shall be applicable as per prevailing SBP instructions, issu
iii. Profit on the said transaction will be recognized as per the provisions of IFAS-1.
These instructions are applicable with immediate effect.
Please acknowledge receipt.
Invoice of Murabaha Transactions
Please refer to Annexure -1 of IBD Circular No.2 of 2008 (Appendix-A- Essentials of Islamic Modes-Murabaha, sub clause vi) that requires IBIs to obtain inv
Murabaha transactions. However, considering the practical difficulties in obtaining invoices, particularly, in transactions like purchase of phutti, raw hides,
instructions on obtaining invoices have been reviewed and amended as under:
The invoice issued by the supplier shall be in the name of Bank- Account Client e.g. “1st Islamic Bank – ABC Company”. In case where obtaining invoice in t
invoice in the name of client may also be acceptable, subject to specific approval of the Shariah Advisor, for all such transactions.
In transaction where obtaining formal invoice either in the name of bank or the client is not possible, then the document or combination of documents like
Goods Received Notes, Physical Inspection Report, Kachi Parchi, Inward Gate Pass etc having particulars (i.e. names of buyer & seller, date of purchase/de
quantity and purchase amount etc.) may be accepted in lieu of invoice with the approval of Shariah Advisor.
The Shariah Advisor while approving any transactions as mentioned in Para (i), (ii) above, shall document the reasons/industry norms etc. due to which ob
payment directly to the supplier is not possible. He shall also review and approve the process flows etc to be adopted by the client/IBI to execute such tran
shall also, either themselves or through suitably trained staff of the IBIs, make onsite verifications of such transactions on sample basis.
The payment for Murabaha transactions shall either be made directly to supplier or credited in an escrow account by the IBIs. However, in cases where dir
possible due to genuine reasons, the payment to the supplier may be made through the agent subject to explicitly recording the reasons and approval of p
transactions by the Shariah Advisor.
Further with the issuance of the above instructions the IBD Circular No. 04 dated November 15, 2008 will stand repealed.
Please acknowledge receipt.

Collection of Utility Bills After Due Date by Islamic Banking Institutions (IBIs)
This refers to BPRD Circular No. 3 of 2006, read with BPRD Circular No 38 of 1997 and relevant instructions issued from time to time, whereby all branches
including Islamic banks are required to collect utility bills from their customers. The aforementioned instructions to facilitate the payment of utility bills are
No. 4 of 2006 issued by the honorable Supreme Court. However, it has been observed that some Islamic Banking Institutions (IBIs) refuse to accept payme
late payment includes a penalty which in their opinion is Riba and thus cannot be collected by them.
2. The matter was discussed with the Shariah Advisors of all IBIs at the Shariah Advisors’ Forum as well as the SBP Shariah Board. The Shariah Scholars opin
public interest and convenience, the IBIs can collect /accept utility bills after the due date with ‘Karahiat’(‫( )کراہیت‬displeasure).
3. IBIs are therefore advised to strictly comply with SBP’s prevalent instructions on collection of utility bills within and after the due date at their branches.
Please acknowledge receipt.

Presentation of Shariah Compliance Report to the Board of Directors

Please refer to Para C ‘Report of Shariah Advisor’, Annexure - 1 Instructions for Shariah Compliance, notified through IBD Circular No. 2 dated 28th March,
is required to prepare a report regarding Shariah compliance, which is published in the Islamic Banking Institutions’ (IBIs) annual report.
In order to provide the opportunity to the Shariah Advisor to present the report so prepared to the Board of Directors (BoD) and apprise the BoD about his
compliance levels and environment in the Institution, the IBIs are advised to invite their respective Shariah Advisor for discussion on the Shariah Complian
which annual audited accounts and Shariah Advisor’s report are discussed and approved.
Please acknowledge the receipt.

RATIONALIZATION / DISCONTINUATION OF RETURNS (SCHEDULE OF SERVICE CHARGES)

Please refer to BPRD Circular No. 5 of 2010 on the captioned subject, read with BPD Circular NO. 33 of 2003 and section ‘I’ of Annexure-I to IBD Circular No
of Schedule of Service Charges to SBP.
2. It has been decided to discontinue with immediate effect, the submission of Schedule of Service Charges by Islamic Banking Institutions to Islamic Banki
3. All other instructions relating to Schedule of Service Charges as contained in the IBD Circular No. 2 of 2008 and BPD Circular No. 33 of 2003 shall howeve
Please acknowledge receipt.

CRITERIA FOR CONVERSION OF CONVENTIONAL BANKING BRANCHES INTO ISLAMIC BANKING BRANCHES
Please refer to IBD Circular No. 2 of 2004 wherein SBP has given the criteria for establishment of Islamic Banking Division (IBD) and opening of standalone
conventional commercial banks and BPRD Circular No. 15 of 2007 on Branch Licensing Policy for all banks including Islamic Banking Institutions.
2. While the above referred circulars cover opening of new Islamic banking branches by conventional commercial banks, however, the conversion of conve
Islamic banking branches have not been covered in these circulars.
3. In order to streamline the process and facilitate conventional banks in conversion of their existing conventional branches into Islamic banking branches,
developed, which is annexed herewith.
4. This criteria shall be applicable with immediate effect and the banks henceforth shall prepare their conversion plans and strategies in line with the criter
in-principle approval and grant of license for Islamic banking branches.
Please acknowledge receipt.
Encl. Annexure (Conversion Criteria)
Adoption of Shariah Standards Issued by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)
Please refer to Para F ’Essentials of Islamic Modes of Financing’, Annexure-I –Instructions for Shariah Compliance, notified through IBD Circular No. 2 dated
essentials prescribed for Islamic modes of financing are given as ‘minimum requirements’ for Shariah compliance for Islamic Banking institutions (IBIs). For
essentials have not been prescribed, AAOIFI Shariah standards may be used as guidelines by IBIs in consultation with their Shariah Advisor (SA).
2. To harmonize and standardize the Shariah practices and procedures of IBIs as per internationally recognized standards, it has been decided that AAOIFI
in gradual manner, after a detailed review, keeping in view the local environment and needs of Islamic Banking Industry in Pakistan.
3. In the first phase, AAOIFI’s Shariah Standards No.3 (Default in Payment by a Debtor), No.8 (Murabaha to the Purchase Orderer), No.9 (Ijarah & Ijarah Mu
(Mudaraba) have been reviewed and are hereby adopted for IBIs in Pakistan. The adoption of these Standards shall, however, be subject to certain clarific
the attached Appendix- A. IBIs are also advised to be prepared for adoption of other AAOIFI’s Shariah Standards in next phases.
4. It may be noted that adoption of the AAOIFI Shariah Standards for IBIs is in addition to current Prudential Regulations, guidelines and other circulars and
departments from time to time and are not replacing them by any means. Further, in case of any conflict with the Shariah Standards adopted vide this circ
Modes of Financing’, Annexure-I –Instructions for Shariah Compliance of IBD Circular No. 2 dated March 25, 2008 shall prevail.
5. To provide ample time and a level of comfort to IBIs for preparation, it has been decided that these standards shall be implemented w.e.f July 01, 2010;
these instructions may invoke penal action under the provisions of Banking Companies Ordinance, 1962.
Please acknowledge receipt.
Encl: Appendix-A

Revision of Capital Adequacy Requirement (CAR) For IBBs

Please refer to clause 7 of Annexure-III of IBD Circular No. 2 of 2004 (read with BPRD Circular No.1 of 2003), regarding Capital Adequacy Ratio (CAR) requir
Divisions / Branches of conventional Banks. It has been decided to revise clause 7(i) of IBD Circular No. 2 (Annexure-III) of 2004 immediately as under:-
Clause 7(i):
Islamic Banking Fund / CAR
All conventional Banks having Islamic Banking License for IBBs should maintain a minimum Islamic Banking Fund of Rs 50 million, at any point of time as se
maintain Capital Adequacy Ratio (CAR), as applicable on Bank-wide basis, prescribed by SBP from time to time.
All other instructions contained in the said Circular shall remain the same.
Please acknowledge receipt.

Submission of Returns to IBD-Revision of MSP

Please refer to IBD Circular Letter No 1 of 2006 on captioned subject and subsequent instructions issued on subject from time to time.
As you are aware that recently parallel run of Quarterly Report of Conditions (QRC) has been called off vide OSED Circular Letter No 1 of 2009. Therefore y
submission of paper based QRC Part A, B & C.
Moreover, as per Circular No 1 of 2009 on “Implementation of Islamic Financial Accounting Standard for Ijarah (IFAS 2-Ijarah)” format of Monthly Stateme
revised and attached herewith.
All Islamic banking Institutions are advised to report MSP on new format with effect from April 2009, through email only at ibd.reproting@sbp.org.pk. All o
remain unchanged.
Enclosed: New format of MSP

Implementation of Islamic Financial Accounting Standard for Ijarah (IFAS 2)

Please refer to Islamic Financial Accounting Standard for Ijarah IFAS – 2 notified by the Securities and Exchange Commission of Pakistan (SECP) as per SRO
2007 and Clause-V of Annexure 2 to IBD Circular No 2 of 2008 regarding Financial Reporting and General Disclosure for Islamic Banking Institutions (IBIs).
In view of the representation of Pakistan Banks’ Association regarding practical issues in implementation of this standard for the reporting year ended Dec
decided to allow implementation of this standard w.e.f January 01, 2009. Accordingly, IBIs shall ensure that henceforth all returns/statements submitted t
Quarterly/Annual Financial Statements shall be prepared in line with this Standard.
Please acknowledge receipt.

Instructions and Guidelines for Shariah Compliance in Islamic Banking Institutions

Please refer to IBD Circular No.2 dated 25th March, 2008 on the above subject.
2. With a view to facilitate the Islamic Financial Industry, it has been decided to revise clause 1(vi) of Appendix A to Annexure I of IBD Circular # 2 of 20
Islamic Modes of Financing (Murabaha), as follows:
“vi) Wherever possible, the invoice issued by the supplier shall be in the name of Bank- Account Client e.g. “1st Islamic Bank – ABC Company” as the comm
agent on behalf of such financier. In case it is not possible, then specific approval from the Shariah Advisor should be sought for the transactions. It is prefe
commodities should be made by the financier directly to the supplier or credited in an Escrow Account. In both the cases, the Murabaha financing account
completion of offer and acceptance between the customer and the IBI. If direct payment to the supplier by the IBI is not feasible for valid reasons, such rea
for making payment to the supplier through the agent for purchase of goods. However, in this case proper utilization of funds shall be ensured by the IBI.”
3. Other instructions on the subject shall remain unchanged.
4. Please acknowledge receipt.
FIT AND PROPER CRITERIA FOR SHARIAH ADVISORS
Please refer to IBD Circulars No.2 and 4 dated March 20, 2007 and August 16, 2007 respectively on the above subject.
2. With a view to facilitate the Islamic Financial Industry, it has been decided to revise Para 7 (a) & (b) of Annexure to IBD Circular No.2 of 2007, regarding
a) The Shariah Advisor of an Islamic Banking Institution (IBI) shall not work in any other IBI in any capacity whatsoever. Additionally, in the spirit of good co
Advisor shall approve a transaction from both sides representing two financial institutions.
b) Shariah Advisor of an IBI shall not hold any executive/non-executive position in any other financial institution, except working as member Shariah Board
institution(s).
3. Other instructions on the subject shall remain unchanged.
4. Please acknowledge receipt.

INSTRUCTIONS AND GUIDELINES FOR SHARIAH COMPLIANCE IN ISLAMIC BANKING INSTITUTIONS

State Bank is promoting and developing Islamic banking industry in Pakistan as a parallel system and this sector is witnessing tremendous growth and incre
stakeholders. In order to ensure effective Shariah compliance in the Islamic banking industry and maintain trust of the depositors and other stakeholders o
compliance mechanism has been put in place by SBP.
2. In pursuance of its goal to further strengthen the Shariah compliance framework in the Islamic banking industry, ‘Instructions and Guidelines for Shariah
in consultation with various stakeholders which have also been reviewed and approved by the SBP Shariah Board. It may be noted that these Instructions a
Institutions (IBIs) are in addition to current Prudential Regulations, guidelines and other circulars and directives issued by different departments of SBP and
means, unless specifically mentioned otherwise.
3. The ‘Instructions for Shariah compliance in IBIs’, enclosed herewith as Annexure-1, cover various areas related to appointment, removal and working of
resolution in Shariah rulings; Shariah compliant modes; use of charity fund, introduction of new products and services and schedule of service charges etc.
Islamic modes of financing, earlier issued by SBP through a press release on April 15, 2005, have now been augmented and made part of these instructions
thereto.
4. Furthermore, in exercise of the powers conferred by clause (o), subsection (1) of section 7 of Banking Companies Ordinance, 1962, State Bank of Pakista
specified Shariah-compliant modes of banking and finance for IBIs. Annexure-I of BCD Circular No.13 dated 20th June, 1984 shall stand replaced by section
it relates to IBIs. Further, as the requirements of IBD Circular No. 1 dated March 05, 2007 have been made a part of these Instructions, therefore the said c
5. Failure to comply with the enclosed Instructions may invoke penal action under the provisions of Banking Companies Ordinance, 1962.
6. The ‘Guidelines for Shariah compliance in IBIs’ enclosed herewith as Annexure-2 are meant for providing guidance in areas like Shariah compliance, inte
shares, policy for profit distribution with PLS account holders and financial reporting and general disclosure etc. Necessary flexibility has been provided in
up the suggested systems and procedures keeping in view the size and scope of their operations. These guidelines are being issued on “comply or explain
in writing for non-compliance with any of these guidelines.
7. These Instructions and Guidelines would be applicable with immediate effect.
8. Please acknowledge receipt.

Encl:
1. Annexure-1 - Instructions for Shariah Compliance
2. Annexure-2 - Guidelines for Shariah Compliance

Submission of Information regarding Sukuk Issued in Pakistan

All Islamic banking institutions (IBIs) i.e. Islamic banks and conventional banks having Islamic banking branches are advised to provide information regardin
where the IBI concerned is involved as an issuer or a lead arranger. The said information should be sent, as a footnote to the Quarterly Report of Condition
prescribed format attached as Annexure from the quarter ending March 2008.
Furthermore you are also advised to submit the requisite information about the Sukuk issued till date as per abovementioned format latest by 10th March
Kindly acknowledge receipt.
Encl: Annexure
Risk Management Guidelines for Islamic Banking Institutions
The State Bank of Pakistan has formulated Risk Management (RM) Guidelines for Islamic Banking Institutions (IBIs) with a view to further strengthen the re
risk management for IBIs.
2. These RM Guidelines are based on a ‘Guiding Principles of Risk Management for Institutions offering Islamic Financial Services’ issued by Islamic Financi
an international-standard setting body of regulatory and supervisory agencies and the same have been tailored keeping in view the regulatory regime of S
these guidelines will be in addition to the various Risk Management Guidelines issued by SBP from time to time and IBIs will be required to comply with bo
3. These guidelines provide a set of principles of best practice for establishing and implementing effective risk management in IBIs. These guidelines set ou
management and provide guidance for each category of risk, drawn from discussion on Islamic Financial Industry practices. Further, these set of principles
of risks viz: Credit risk, Market risk, Liquidity risk, Operational risk, Equity investment risk and Rate of return risk. For each type of risk, Risk management p
examples of specific Islamic banking modes of financing and according to various roles that an Islamic Banking Institution may perform.
4. These guidelines will further complement and enhance the current Risk Management regime of SBP by identifying and suggesting technique to manage
Islamic Banking Institutions.
5. Since most of the IBIs in Pakistan are new entrants in the market, they are encouraged to put in place an effective risk management strategy right from
guidelines as well as other guidelines issued by SBP. These guidelines are flexible in the sense that IBIs can adapt them in line with the size and complexity
6. Please acknowledge receipt.
Annexure

Declaration of Weightages & Profit Sharing Ratios

The weightages & Profit sharing ratios are used by Banks to calculate distribution of profit as per the requirements of Shariah covering Islamic Banking. It h
Institutions offering Islamic Banking are regularly updating weightages & Profit sharing ratios, before beginning of the period concerned, on their websites
situation. Therefore all Institutions offering Islamic Banking are advised to make sure that relevant weightages and ratios are updated regularly, before sta
keeping in view the following minimum standards:
1. Weightages & Profit sharing ratios must be made available to all constituents before beginning of the period concerned. The weightages & Profit sharing
website.
2. The statement declaring weightages & Profit sharing ratios must at the minimum contain date of declaration, period for which they remain effective, all
share and their weighatage, types, sizes, tiers of accounts and actual rates paid during the preceding period.
3. The Statement of weightages & Profit sharing ratios must be prominently displayed in all Islamic Banking Branches.
4. All Islamic Banking Institutions are advised to update the weightages & Profit sharing ratios on their websites within 7 days form issuance date of this Ci

Information about Islamic Banking Windows

In terms of Para 10(v) of Annexure III to IBD Circular No.2 of 2004, banks having Islamic Banking Branches(IBBs) may authorize some of their branches to se
schemes in order to efficiently utilize the existing branch network provided they comply with conditions mentioned therein.
2. There is now a growing trend among banks to open Islamic Banking windows. In order to strengthen the regulatory framework and maintain inform
all conventional banks having IBBs are hereby advised to submit to this department following information before start of each Islamic banking window ope
* Details of products & services to be offered in IB window
* Details of systems and controls put in place in compliance with IBD Circular No. 2 of 2004.
* Commission/fee arrangement with authorized branch.
* Details about training of Human Resource in Islamic Banking.
* Contact details of Islamic Banking Window
3. Further, consolidated information about Islamic banking window shall be submitted to the Director Islamic Banking Department, State Bank of Pakis
Conditions as per the format enclosed as Annexure-I.w.e.f quarter ending 31st December, 2007. Any failure to comply with these instructions may result
Companies Ordinance, 1962.
4. Please acknowledge receipt.

SUBMISSION OF RETURNS TO ISLAMIC BANKING DEPARTMENT

Please refer to IBD Circular Letter No. 2, dated May 28, 2007 on captioned subject, in terms of which Islamic Banks (IBs)/ Banks having Islamic Banking Bra
submit the soft copy of Weekly Statement of Position (WSP) at ibd.reporting@sbp.org.pk
Since data of Weekly Statement of Position (WSP) has been fully captured by RCOA / DAG, Therefore you are advised to discontinue the submission of soft
Position by e-mail with effect from November 03, 2007. Moreover, deadline to submit the data through RCOA / DAG would be two working days following
advised vide BSD Circular No. 4 of 2005 dated July 16, 2005. All other instructions on the subject remain unchanged.
Guidelines for Islamic Microfinance Business
Pakistan is among the few countries in the world, which has a separate legal and regulatory framework for Microfinance Banks. The framework allows mic
extend range of microfinance services to poor and low income people through various arrangements. With the growing popularity of Islamic Banking in th
necessary to provide options for provision of Islamic microfinance services by microfinance and commercial banks as well as allowing full fledged Islamic m
2. Consequently, State Bank of Pakistan has formulated guidelines for provision of Islamic microfinance products and services by financial institutions whic
circular. These guidelines are aimed at broadening the coverage of microfinance products and services to low income segments of the society in a Shariah
guidelines stipulate four types of institutional arrangements for offering Islamic microfinance viz:
i. Establishing Full Fledged Islamic Microfinance Banks (IMFBs)
ii. Islamic Microfinance Services by Full-fledged Islamic Banks
iii. Islamic Microfinance Services by Conventional Banks
iv. Islamic Microfinance Services by Conventional Microfinance Banks (MFBs)
3. It must be taken into account that the criteria mentioned in these guidelines shall be in addition to the requirements already issued by SBP under respe
institutions. These regulations and guidelines, by any means, are not replacing the regulations and guidelines already issued by SBP from time to time in th
4. Commercial and microfinance banks interested in building Islamic microfinance portfolio should review the different institutional/organizational arrange
combination of more than one mode, based on their organization structure, capacity and overall objectives.
5. Please acknowledge receipt.

FIT AND PROPER CRITERIA FOR SHARIAH ADVISORS

Please refer to Para 2 of IBD Circular No. 2 dated March 20, 2007 in terms of which a period of six months was allowed to Shariah Advisors of Islamic Banki
working in an executive/non-executive position in another financial institution, except working as Shariah Advisor of mutual fund of the same IBI, to regula
either of the posts.
2. For the purpose of Fit & Proper Criteria for Shariah Advisors, Takaful companies shall be included in the definition of financial institutions.
3. The existing period by which Shariah Advisors were required to regularize their position as indicated in para 1, has now been extended till June 30, 2
working for an IBI and holding any executive/non-executive position in any other financial institution, except as Shariah Advisor of Islamic mutual funds of
required to regularize the position and relinquish either of the posts by June 30, 2008.
4. All Islamic banking institutions are required to submit a compliance report from Shariah Advisor of their bank to this effect till July 7, 2008.
5. Please acknowledge receipt.

DIRECTIVE UNDER SECTION 41 OF BCO, 1962

It has been noted that some banks are marketing their products by using the name of Islamic or Shariah compliant modes of financing without obtaining a
State Bank of Pakistan. Such products often do not comply with the ‘Essentials of Islamic Modes of Financing’ issued by SBP through Press Release dated 1
the fact that such product offerings violate regulations and guidelines in force.
2. Therefore, all banks not authorized by issuance of an Islamic banking license from SBP are hereby directed under Section 41 of the Banking Companies O
products in the name of Shariah compliant products and services without first obtaining an Islamic banking license from SBP in terms of IBD Circular No. 2
time.
3. Consequently, any recoveries made or penalties imposed by banks from their clients in excess of originally agreed pricing under the purported Shariah c
be refunded to respective customers within 15 days of this circular with confirmation in writing of the same to Director, Islamic Banking Department.
4. Failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance, 1962.
5. Please acknowledge receipt.

ISLAMIC FINANCIAL ACCOUNTING STANDARD-1 MURABAHA

Please refer to SRO No 865(I)/2005 dated August 24, 2005 issued by SECP on captioned subject, in terms of which Islamic Financial Institutions were requir
transactions at amortized cost. Moreover, your attention is being drawn to BSD Circular No 4 of 2006 dated February 17, 2006, where banks were advised
Accounts on revised formats.
Some Islamic Banking Institutions sought guidance whether they should prepare QRC as per requirement of IFAS1-Murabaha. It is clarified that as per Acco
required to follow the same polices as used in preparation of annual audited accounts. T herefore Islamic Banking Institutions are advised that with effect
30, 2007, QRC would be prepared following the Islamic Financial Accounting Standard -1 “Murabaha”.

SUBMISSION OF RETURNS TO ISLAMIC BANKING DEPARTMENT

Please refer to our Circular Letter No. 1, dated May 05, 2006 on captioned subject, in terms of which Islamic Banks (IBs)/ Banks having Islamic Banking Bran
copy of returns to Islamic Banking Department as well. Now IBs & IBBs are advised to discontinue the submission of hard copy of Weekly Statement of Pos
Department and submit the soft copy (on enclosed format) at ibd.reporting@sbp.org.pk with effect from June 02, 2006.
Further IBs/ IBBs are advised to submit a Monthly Statement of Position, format of which is enclosed. The Monthly Statement of Position (MSP) should rea
Department within 5 working days of the reporting month. Moreover, besides submitting the hard copy of monthly statement of position, please e-mail th
ibd.reporting@sbp.org.pk within the same timeline. This data of MSP would however shortly be included in SBP’s Reporting Chart of Accounts (RCOA) for o
FIT AND PROPER CRITERIA FOR SHARIAH ADVISORS
In supersession of IBD Circular No.3 dated October 26, 2004 a revised ‘Fit and Proper Criteria for Shariah Advisors of Islamic Banking Institutions’ and SAP-F
immediate effect. The attached revised guidelines/formats shall henceforth be used by all IBIs desiring to appoint a Shariah Advisor for related evaluation
SBP for prior clearance.
2. In terms of the revised criteria, inter alia, Shariah Advisor shall not hold any executive/non-executive position in any other financial institution, except w
Islamic mutual funds of the same IBI. In case Shariah Advisor of an IBI is already working on some executive/non-executive position in any other financial i
Advisor of Islamic mutual funds of the same IBI, the position should be regularized within a period of 6 months hereof by relinquishing either of the posts.
3. In order to update the database of Shariah Advisors of IBIs in Pakistan, all the existing IBIs are advised to submit information about their Shariah Advisor
SAP-Form, within 30 days of issuance of this circular.
4. Moreover, Shariah Advisors of all IBIs will sign a declaration as per enclosed format before assuming office. The declaration be kept on record with the I
the declaration as per enclosed format must be obtained immediately and placed on record. Please confirm compliance of the foregoing within 30 days fro
circular.
5. Please acknowledge receipt.

DATA BASED ON ANNUAL AUDITED ACCOUNTS

Banking System Review (BSR) is a comprehensive document published annually by State Bank of Pakistan. One chapter is dedicated for Islamic banking. BS
process. You are advised to send us the data based on annual audited accounts as of December 31, 2006 on attached format (alongwith a soft copy at ahm
March 30, 2007.

Salient Features of Products and Services

It is encouraging to note that Islamic Banking Industry is rapidly expanding in Pakistan and the range of products and services offered by Islamic Banking In
with the passage of time. The IBIs are required to send information about new products and services alongwith Certificate from their Shariah Advisor to St
launching of the same.
In order to streamline the process, it has been decided that before launching new products and services, IBIs shall submit salient features of the products a
Certificate from their Shariah Advisor to the Director Islamic Banking Department, State Bank of Pakistan. Failure to comply with these instructions may re
under the BCO, 1962.
Further, in order to update our record, all IBIs are advised to submit information about each of their existing outstanding products and services as per encl
later than 31st March, 2007.
Please acknowledge receipt.

SUBMISSION OF RETURNS TO IBD

Please refer to the various returns submitted by the banks to Banking Supervision Department. It has been decided that henceforth a copy of the following
Islamic Banking Department as well, with effect from the dates as mentioned against the respective returns.
Returns Reference: BSD Circular No To be submitted from
Weekly statement of position 04 of July 16, 2005 First Week of May, 2006
Quarterly report of condition 12 of December 30, 2003 Quarter ending June 30, 2006
Half yearly/Quarter Ended Financial statement 01 of January 07, 2004 Period ending June 30, 2006
Annual Accounts 01 of January 07, 2004 As of/on December 31, 2006
Timelines and all other terms and conditions for submitting Annual, Half Yearly, Quarterly financial statements will remain same as per above-mentioned c
time). Please ensure meticulous compliance of these instructions.
Please send all of the Returns at the following address:
The Director
Islamic Banking Department
7th Floor, State Bank of Pakistan
I.I. Chundrigar Road
Karachi.

FIT AND PROPER CRITERIA FOR SHARIAH ADVISORS

Please refer to Annexure-IV to IBD Circular No.2 dated 29th April, 2004 on the captioned subject.
In order to facilitate the Islamic banking institutions, the Shariah Board of State Bank of Pakistan has revised the Fit and Proper Criteria for Appointment of
has been decided to replace Fit and Proper Criteria as well as Form-SAP circulated earlier, vide above-mentioned circular, with the attached Annexure and
3. All existing Islamic banking institutions are advised to submit the duly filled in revised Form SAP in respect of Shariah Advisors appointed by them within
circular.
4. Please acknowledge receipt.
Essentials and Model Agreements for Islamic Modes of Financing
The State Bank of Pakistan had placed on April 16, 2004 the Essentials and Model Agreements for Islamic Modes of Financing on its Website (www.sbp.org
Mod-Agreement.htm) to invite suggestions and comments from banks, Shariah scholars, chambers of commerce and industry, business community, unive
State Bank has so far received some comments from a number of individuals but the process is rather slow.
As the Essentials and Model Agreements have to serve as the standard documents for the State Bank as also the commercial banks, these have to be finali
of suggestions/comments received from various stakeholders. Therefore, July 31, 2004 has been fixed as the cut-off date for receipt of comments.
You are requested to please send your comments / suggestions latest by July 31, 2004 to enable the State Bank to finalize relevant regulations at the earlie

Minimum Shariah Regulatory Standards

In order to promote Islamic Banking in Pakistan it has become necessary that Guidelines issued vide BPD Circular # 1 dated 1st January, 2003 be modified
minimum Shariah regulatory standards for Islamic Banks, Islamic Banking Subsidiaries and Islamic Banking Branches be issued.
The minimum Shariah regulatory standards and the “Fit and Proper Criteria” framed for selection of the Shariah Advisor, duly approved by the SBP Shariah
the Guidelines and are attached as annexure I, II, III and IV to this Circular. Banks carrying out Islamic banking operations should enforce the Fit and Proper
2004 or those who wish to start such operations as laid down in the guidelines should follow the instructions in both letter and spirit. Failure to comply wit
penalty under the provisions of BCO. 1962.
Kindly acknowledge receipt.

Contact Details of Islamic Banking Department

As you are aware, a full-fledged department for regulation and promotion of Islamic Banking has been established in the State Bank. The objective of this d
banking industry in undertaking Islamic Banking and taking it to a level where it becomes the banking of first choice by the users of financial services.
The department has been staffed with personnel having rich experience in regulating the banking industry with in depth knowledge of all aspects of Islami
Mr. Pervez Said is heading this department. He has extensive experience in conventional as well as Islamic Banking businesses in Pakistan and abroad with
banks.
The contact details of officials working in the Department are as under:
Mailing Address:
Islamic Banking Department
State Bank of Pakistan
I.I. Chundrigar Road
Karachi.
Fax No. 9212472
Phone Numbers:
Sr. No. Name Designation Phone No. E-mail Address
1.Pervez Said Director 9212495 pervez.said@sbp.org.pk
2.Muhammad Ayub Sr. Joint Director 9212567 ayub.chouhedry@sbp.org.pk
3.Mahmood Shafqat Joint Director 9212509 mahmood.shafqat@sbp.org.pk
4.Muhammad Sharif Junior Joint Director 24450-3740 m.sharif@sbp.org.pk
5.Osman Aurakzai Junior Joint Director 24450-3744 osman.aurakzai@sbp.org.pk
6.Munir Ahmed Assistant Director 24450-3736 munir.ahmed@sbp.org.pk
7.Ashfaq Ahmed Regulating Officer 24450-3757 ashfaq.iba@sbp.org.pk
8.Farid Khan Regulating Officer 24450-3757 farid.khan@sbp.org.pk
9.Manzoor Ahmad Regulating Officer 24450-3757 manzoor.ahmad@sbp.org.pk
Please address all correspondence relating to Islamic banking to the Director, Islamic Banking Department. It is our endeavor to facilitate financial instituti
Islamic Banking businesses. Towards this end, we look forward to being in constant touch with you. You are welcome to contact us at any time on any issu
Policies For Promotion Of Islamic Banking
In order to promote Islamic Banking in Pakistan, State Bank is following a three-pronged strategy as under:
I) Establishment of full-fledged Islamic bank(s) in the private sector;
II) Setting up of subsidiaries for Islamic Banking by existing commercial banks; and
III)Allowing Stand-alone branches for Islamic banking in the existing commercial banks.
2.In line with Part-I of this strategy, on 1st December, 2001, State Bank of Pakistan had already issued detailed criteria for setting up of Scheduled Islamic C
Principles in the Private Sector in the form of a Press Release, which is reproduced at Annexure-I.
3.As regards Part-II of this strategy, in terms of Banking Companies (Amendment) Ordinance, 2002 notified in the Gazette of Pakistan dated November 4, 2
has now been inserted in sub-section (1) of section 23 of the Banking Companies Ordinance as follows:
(aa) the carrying on of banking business strictly in conformity with the Injunctions of Islam as laid down in the Holy Quran and Sunnah”
4. Therefore, the scheduled commercial banks are henceforth allowed to open subsidiaries for Islamic Banking operations. Accordingly, a Detailed Criteria
Subsidiaries by existing Commercial Banks has been prepared, which is enclosed at Annexure-II.
5. For Part-III of this strategy, Guidelines for opening of Stand-alone branches for Islamic banking by existing commercial banks, enlisting Eligibility Criteria,
operational guidelines on the subject have been prepared. These Guidelines are enclosed at Annexure-III.
6. Those interested in establishing Scheduled Islamic Commercial Banks in the Private sector, Subsidiaries or Stand alone branches for Islamic banking, ma
Policy Department, State Bank of Pakistan, I.I. Chundrigar Road, Karachi in line with the above-mentioned policies.
Encl: as above.
1. Annexure-I (Islamic Commercial Banks)
2. Annexure-II (Islamic Banking Subsidiary)
3. Annexure-III (Islamic Banking Branches)
4. Annexure-A
5. Application Form for Islamic Commercial Bank
6. Annexure To Form–A
Remarks Keywords

AAOIFI Shariah Standards adopted: AAOIFI Shariah Standards

15
39
46

AAOIFI Shariah Standards adopted: AAOIFI Shariah Standards

10
11
25
50

Previous Reference: Shariah Non Compliance Risk (SNCR)

IBD Circular No. 1 of 2008 dated 02-Jan-2008 Management
on Risk Management Guidelines for Islamic
Banking Institutions (IBIs)

Date Effective:
30-Sep-2021
Previous Reference: Shariah Governance Framework (SGF)
1- Shariah Governance Framework 2018 &
2 -Para 3A(v) of IBD Circular No. 01 of 2018
dated June 07, 2018

Previous Reference: Criteria for establishing IBIs

IBD Circular No. 2 dated 29th April, 2004 Commencement of Shariah compliant
business

AAOIFI Shariah Standards adopted: AAOIFI Shariah Standards

49

Islamic Banking Windows (IBWs)

 COVID-19

AAOIFI Shariah Standards adopted: AAOIFI Shariah Standards

19
23
28

Previous Reference: Training & capacity building of IBIs

clause No-12 of Annexure-I notified vide IBD
Circular No. 02 of 2018 dated June 29, 2018

AAOIFI Shariah Standards adopted: AAOIFI Shariah Standards

2
5
14
18
24
38

Effective Date: Training & capacity building of IBIs

July 2018
Previous Reference: Shariah Governance Framework (SGF)
IBD Circular No. 1 of 2015 dated 07-Apr-2015 Fit & proper criteria
IBD Circular Letter No.1 of 2016 dated 12-Apr- Shariah Board
2016 Shariah Advisors
IBD Circular Letter No.1 of 2017 dated 27-Mar- RSBM
2017

Shariah Governance Framework revised and

updated

Shariah Board
Shariah Advisors

Conversion of conventional bank into Islamic

Bank

Previous Reference: Shariah Governance Framework (SGF)

1) Para 7 of ‘Shari’ah Governance Framework

(SGF) for IBIs’ regarding External Shari’ah
Audit notified vide IBD Circular No. 1 of 2015
dated April 07, 2015

2) Para 7 of the instructions issued vide IBD

Circular No.3 of 2012 dated 19-Nov-2012
Previous Reference: Exemption of KIBOR
Wakala mode based products
1) BPD Circular No. 1 of 2004 dated 21st
January 2004

2) Risk Management Guidelines for Islamic

Banking Institutions issued vide IBD Circular
No. 1 of 2008 dated 02-Jan-2008

3) IBD Circular No.02 of 2008 dated 25-Mar-

2008

4) AAOIFI Shariah Standard No.13 as adopted

vide IBD Circular No.01 of 2010 dated 12-Jan-
2010

5) AAOIFI Shariah Standard No.12 as adopted

vide IBD Circular No.01 of 2013 dated 08-Apr-
2013

Previous Reference: Shariah Governance Framework (SGF)

Para 3(E) of Shariah Governance Framework

(SGF) for Islamic Banking Institutions (IBIs)
notified vide IBD Circular No. 1 of 2015

Previous Reference: Foreign bill discounting

1) IBD Circular No. 2 of 2014 dated April 03,

2014, read with

2) IBD Circular Letter No. 2 of 2014 dated April

14, 2014

Previous Reference: Shariah Governance Framework (SGF)

1) IBD Circular No. 3 of 2014 dated 04-Apr-

2014

Previous Reference: Shariah Governance Framework (SGF)

1) IBD Circular No. 3 of 2014 dated 04-Apr-

2014
Previous Reference: Foreign bill discounting

1) IBD Circular No. 2 of 2014 dated April 03,

2014

Previous Reference: Shariah Governance Framework (SGF)

IBD Circular No. 2 of 2008 dated 25-Mar-2008

Priority banking services

Foreign bill discounting

Previous Reference: Islamic Banking Windows (IBWs)

1) IBD Circular No. 6 of 2007 dated 10-Nov-

2007

2) IBD Circular No. 2 of 2004 dated 29-Apr-

2004

AAOIFI Shariah Standard adopted: AAOIFI Shariah Standards

17

AAOIFI Shariah Standard adopted: AAOIFI Shariah Standards

12

Previous Reference:

Para 5 of Appendix-A to Annexure-1 of IBD

Circular No. 2 of 2008 dated 25-Mar-2008
Previous Reference: Shariah Standard
Shirkatul Milk
Para 8 of Appendix-A to Annexure-1 of IBD Diminishing Musharakah
Circular No. 2 of 2008 dated 25-Mar-2008

Previous Reference: Products & services

Para H of Appendix 1 to Annexure-1 of IBD

Circular No. 2 of 2008 dated 25-Mar-2008

Previous Reference: Pool management

Profit & loss distribution
‘Instructions for Profit & Loss Distribution and
Pool Management for Islamic Banking
Institutions (IBIs)’ issued vide IBD Circular No.
3 of 2012 dated 19-Nov-2012

Previous Reference: Pool management

Profit & loss distribution
1) Para IV of annexure-II of IBD Circular No. 2
of 2008 dated 25-Mar-2008 (stands
withdrawn)

2) BPRD Circular No. 7 of 2008 dated 30-May-

2008 (Provisions regarding minimum rate of
return on savings deposits shall no more be
applicable on IBIs)

Previous Reference: Accounting treatment

Credit Murabaha
Appendix A(1) of Annexure-1 of IBD Circular
No. 2 of 2008 dated 25-Mar-2008
Previous Reference: Invoice of
Murabaha Transactions
Annexure -1 of IBD Circular No.2 of 2008
dated 25-Mar-2008 (Appendix-A- Essentials of
Islamic Modes-Murabaha, sub clause vi)

Previous Reference: Utility Bills Collection

1) BPRD Circular No. 3 of 2006 dated 05-Jun-

2006, read with

2) BPRD Circular No 38 of 1997 dated 10-Nov-

1997

Previous Reference: Shariah compliance

Para C ‘Report of Shariah Advisor’, Annexure -

1 Instructions for Shariah Compliance, notified
through IBD Circular No. 2 dated 25th March,
2008

Previous Reference: Regularoty returns

1) BPRD Circular No. 5 of 2010 dated 30-Apr-

2010, read with

2) BPD Circular NO. 33 of 2003 dated 02-Oct-

2003

3) Section ‘I’ of Annexure-I to IBD Circular No.

2 of 2008 dated 25-Mar-2008

Previous Reference: Conversion of conventional branches into

Islamic branches
1) IBD Circular No. 2 of 2004 dated 29-Apr-
2004 on criteria for establishment of Islamic
Banking Division and opening of standalone
IBBs at conventional commercial banks

2) BPRD Circular No. 15 of 2007 dated 12-Oct-

2007 on Branch Licensing Policy
AAOIFI Shariah Standards adopted: AAOIFI Shariah Standards
3
8
9
13

Previous Reference:

Para F ’Essentials of Islamic Modes of

Financing’, Annexure-I –Instructions for
Shariah Compliance, notified through IBD
Circular No. 2 dated March 25, 2008

Previous Reference: Capital Adequacy Requirement (CAR)

1) Clause 7 of Annexure-III of IBD Circular No.

2 of 2004 dated 29-Apr-2004, read with

2) BPRD Circular No.1 of 2003 dated 01-Jan-

2003

Previous Reference: Regularoty returns

1) IBD Circular Letter No 1 of 2006 dated 05-

May-2006

2) OSED Circular Letter No 1 of 2009 dated

27-Jan-2009

3) IBD Circular No 1 of 2009 dated 27-Jan-

2009

Previous Reference: Islamic Financial Standard

Ijarah
1) Islamic Financial Accounting Standard for
Ijarah IFAS – 2 notified by the SEC vide SRO
No. 431(I)/2007 dated May 22, 2007

02) Clause-V of Annexure 2 to IBD Circular No

2 of 2008 dated 25-Mar-2008

Previous Reference: Shariah compliance

IBD Circular No 2 of 2008 dated 25-Mar-2008

Previous Reference: Fit & proper Criteria
Shariah advisors
01) IBD Circular No. 2 of 2007 dated March 20,
2007

02) IBD Circular No. 4 of 2007 dated August

16, 2007

Introduction of Shariah Compliance Shariah compliance

instructions & guidelines by SBP

Regularoty returns
Introduction of Risk Management guidelines Risk Management in IBIs
for IBIs by SBP

Pool management
Profit & loss distribution
Weightages
Profit sharing ratio (PSR)

Previous Reference: Islamic Banking Windows (IBWs)

Para 10(v) of Annexure III to IBD Circular No.2

of 2004 dated 29-Apr-2004

Previous Reference: Regularoty returns

IBD Circular Letter No. 2 of 2007, dated May

28, 2007
Introduction of Guidelines for Islamic Islamic microfinance business
Microfinance Business by SBP

Previous Reference: Fit & proper Criteria

Shariah advisors
IBD Circular No. 2 of 2007, dated 20-Mar-2007

Advisory

Previous Reference: Islamic financial Standard

Murabaha
SRO No 865(I)/2005 dated August 24, 2005
issued by SECP

Previous Reference: Regularoty returns

Circular Letter No. 1 of 2006, dated May 05,

2006
Previous Reference: Fit & proper Criteria
Shariah advisors
IBD Circular No.3 of 2004 dated October 26,
2004 (supressed by current circular) on Fit &
Proper Criteria of Shariah Advisors of IBIs

Regularoty returns

Products & services

Previous Reference: Regularoty returns

1) BSD Circular No. 04 of 2005 dated July 16,

2005

2) BSD Circular No. 12 of 2003 dated

December 30, 2003

3) BSD Circular No. 01 of 2004 dated January

07, 2004

Previous Reference: Fit & proper Criteria

Shariah advisors
Annexure-IV to IBD Circular No.2 of 2004
dated 29th April, 2004
 Islamic modes of financing
Agreements

Previous Reference: Shariah compliance

Fit & proper Criteria
BPD Circular No. 1 of 2003 dated 1st January,
2003

Contact details
Promotion of Islamic Banking
Chronological Summary of SBP Circulars related to Islamic Banking

Sr. Circular No. Date Subject

64 IFPD Circular No. 01 29-Aug-23 Adoption of 'Accounting and Auditing Organization for
Islamic Financial Institutions' (AAOIFI) Shariah Standards

63 IBD Circular No. 01 4-Jul-22 Adoption of ‘Accounting and Auditing Organization for
Islamic Financial Institutions’ (AAOIFI) Shariah Standards

62 IBD Circular No. 01 14-Jun-21 Shari'ah Non-Compliance Risk Management

61 IBD Circular Letter No. 01 3-Feb-21 Shari’ah Governance Framework (SGF) for Islamic
Banking Institutions (IBIs)

60 IBD Circular No. 04 2-Oct-20 Guidelines and Criteria for Establishing Islamic Banking
Institutions (IBIs) and Commencement of Shariah
Compliant Business and Operations by Development
Finance Institutions (DFIs)

59 IBD Circular No. 03 2-Sep-20 Adoption of 'Accounting and Auditing Organization for
Islamic Financial Institutions' (AAOIFI) Shariah
Standard(s)
58 IBD Circular No. 02 29-Jul-20 Revised Instructions on Islamic Banking Windows (IBWs)
Operations
57 IBD Circular Letter No. 02 23-Apr-20 Guidelines for Implementation of Regulatory Relief to
Dampen the Effects of COVID-19
56 IBD Circular No. 01 3-Jan-20 Adoption of ‘Accounting and Auditing Organization for
Islamic Financial Institutions’ (AAOIFI) Shariah Standards

55 IBD Circular Letter No. 01 2-Jan-20 Enhanced Training & Capacity Building Measures for
Islamic Banking Institutions (IBIs)
54 IBD Circular No. 01 1-Mar-19 Adoption of 'Accounting and Auditing Organization for
Islamic Financial Institutions' (AAOIFI) Shariah Standards

53 IBD Circular No. 02 29-Jun-18 Enhanced Training & Capacity Building Measures for
Islamic Banking Institutions (IBIs)
52 IBD Circular No. 01 7-Jun-18 Shari’ah Governance Framework (SGF) for Islamic
Banking Institutions (IBIs)

51 IBD Circular Letter No. 01 11-Apr-18 Change in nomenclature of ‘SBP Shariah Board’ to
‘Shariah Advisory Committee’
50 IBD Circular No. 01 6-Jul-17 Guidelines for Conversion of a Conventional Bank into an
Islamic Bank
49 IBD Circular Letter No. 01 27-Mar-17 External Shari’ah Audit Report (Para 7) - Shari’ah
Governance Framework for Islamic Banking Institutions
(IBIs)
48 IBD Circular No. 01 8-Sep-16 Exemption from KIBOR as Benchmark rate for
Participatory and Wakalah Modes Based Products

47 IBD Circular Letter No. 01 12-Apr-16 Report of Shari’ah Board – Para 3(E) of Shariah
Governance Framework

46 IBD Circular Letter No. 01 30-Jun-15 Shariah Compliant Solutions for Foreign Bill Discounting

45 IBD Circular No. 01 7-Apr-15 Shari’ah Governance Framework for Islamic Banking
Institutions (IBIs)

44 IBD Circular Letter No. 03 30-Sep-14 Shariah Governance Framework for Islamic Banking
Institutions (IBIs)

43 IBD Circular Letter No. 02 14-Apr-14 Shariah Compliant Solutions for Foreign Bill Discounting
42 IBD Circular No. 03 4-Apr-14 Shari’ah Governance Framework for Islamic Banking
Institutions (IBIs)

41 IBD Circular No. 01 3-Apr-14 Free-of-cost Priority Banking Services

40 IBD Circular No. 02 3-Apr-14 Shariah Compliant Solutions for Foreign Bill Discounting
39 IBD Circular Letter No. 01 26-Mar-14 Islamic Banking Windows (IBWs)

38 IBD Circular No. 03 15-Jul-13 Adoption of AAOIFI Shariah Standard No. 17 on

‘Investment Sukuk’
37 IBD Circular No. 01 8-Apr-13 Adoption AAOIFI Shariah Standard No. 12 pertaining to
‘Sharika (Musharaka) and Modern Corporations’

36 IBD Circular No. 02 8-Apr-13 Shari’ah Standard on ‘Sharikat ul Milk and Diminishing
Musharakah’

35 IBD Circular Letter No. 02 4-Jan-13 Introduction of New Products and Services

34 IBD Circular Letter No. 01 1-Jan-13 Instructions for Profit and Loss Distribution and Pool
Management for IBIs’ – Clarifications thereof
33 IBD Circular No. 03 19-Nov-12 Instructions for Profit & Loss Distribution and Pool
Management for Islamic Banking Institutions

32 IBD Circular No. 02 29-May-12 Accounting Treatment of Credit Murabaha

31 IBD Circular No. 01 6-Feb-12 Invoice of Murabaha Transactions

30 IBD Circular Letter No. 01 8-Jul-11 Collection of Utility Bills After Due Date by Islamic
Banking Institutions (IBIs)

29 IBD Circular Letter No. 01 6-Dec-10 Presentation of Shariah Compliance Report to the Board
of Directors

28 IBD Circular No. 03 15-Jul-10 Rationalization / Discontinuation of Returns (Schedule of

Service Charges)
27 IBD Circular No. 02 25-Jun-10 Criteria For Conversion of Conventional Banking
Branches into Islamic Banking Branches

26 IBD Circular No. 01 12-Jan-10 Adoption of Shariah Standards Issued by Accounting and
Auditing Organization for Islamic Financial Institutions
(AAOIFI)

25 IBD Circular Letter No. 02 6-Jun-09 Revision of Capital Adequacy Requirement (CAR) For
IBB(s)

24 IBD Circular Letter No. 01 10-Apr-09 Submission of Returns to IBD-Revision of MSP

23 IBD Circular No. 01 27-Jan-09 Implementation of Islamic Financial Accounting Standard
for Ijarah (IFAS 2)

22 IBD Circular No. 04 15-Nov-08 Instructions and Guidelines for Shariah Compliance in
Islamic Banking Institutions

21 IBD Circular No. 03 17-Sep-08 Fit and Proper Criteria for Shariah Advisors

20 IBD Circular No. 02 25-Mar-08 Instructions and Guidelines For Shariah Complince in
Islamic Banking Institutions
19 IBD Circular Letter No. 01 27-Feb-08 Submission of Information regarding Sukuk Issued in
Pakistan
18 IBD Circular No. 01 2-Jan-08 Risk Management Guidelines for Islamic Banking
Institutions
17 IBD Circular Letter No. 05 29-Nov-07 Declaration of Weightages & Profit Sharing Ratios
16 IBD Circular No. 6 10-Nov-07 Information about Islamic Banking Windows

15 IBD Circular Letter No. 04 29-Oct-07 Submission of Returns to Islamic Banking Department

14 IBD Circular No. 5 10-Sep-07 Guidelines for Islamic Microfinance Business

13 IBD Circular No. 4 16-Aug-07 Fit & Proper Criteria for Shariah Advisors

12 IBD Circular No. 3 11-Aug-07 Directive Under Section 41 of BCO, 1962

11 IBD Circular Letter No. 03 2-Jul-07 Islamic Financial Accounting Standard-1 Murabaha

10 IBD Circular Letter No. 02 28-May-07 Submission of Returns to Islamic Banking Department

9 IBD Circular No. 2 20-Mar-07 Fit and Proper Criteria for Shariah Advisors

8 IBD Circular Letter No. 01 17-Mar-07 Data Based on Annual Audited Accounts
7 IBD Circular No. 1 5-Mar-07 Salient Features of Products and Services
6 IBD Circular Letter No. 1 5-May-06 Submission of Returns to IBD

5 IBD Circular No. 3 26-Oct-04 Fit and proper criteria for Shariah Advisors

4 IBD Circular Letter No. 1 1-Jun-04 Essentials and Model Agreements for Islamic Modes of
Financing
3 IBD Circular No. 2 29-Apr-04 Minimum Shariah Regulatory Standards

2 IBD Circular No. 1 23-Apr-04 Contact Details of Islamic Banking Department

1 BPD Circular No. 1 1-Jan-03 Policies For Promotion Of Islamic Banking
Remarks

AAOIFI Shariah Standards adopted:

15
39
46

AAOIFI Shariah Standards adopted:

10
11
25
50

Previous Reference:
IBD Circular No. 1 of 2008 dated 02-Jan-
2008 on Risk Management Guidelines for
Islamic Banking Institutions (IBIs)

Date Effective:
30-Sep-2021

Previous Reference:
1- Shariah Governance Framework 2018
&
2 -Para 3A(v) of IBD Circular No. 01 of
2018 dated June 07, 2018

Previous Reference:
IBD Circular No. 2 dated 29th April, 2004

AAOIFI Shariah Standards adopted:

49

AAOIFI Shariah Standards adopted:

19
23
28

Previous Reference:
clause No-12 of Annexure-I notified vide
IBD Circular No. 02 of 2018 dated June 29,
2018
AAOIFI Shariah Standards adopted:
2
5
14
18
24
38

Effective Date:
July 2018
Previous Reference:
IBD Circular No. 1 of 2015 dated 07-Apr-
2015
IBD Circular Letter No.1 of 2016 dated 12-
Apr-2016
IBD Circular Letter No.1 of 2017 dated 27-
Mar-2017

Shariah Governance Framework revised

and updated

Previous Reference:

1) Para 7 of ‘Shari’ah Governance

Framework (SGF) for IBIs’ regarding
External Shari’ah Audit notified vide IBD
Circular No. 1 of 2015 dated April 07,
2015

2) Para 7 of the instructions issued vide

IBD Circular No.3 of 2012 dated 19-Nov-
2012
Previous Reference:

1) BPD Circular No. 1 of 2004 dated 21st

January 2004

2) Risk Management Guidelines for

Islamic Banking Institutions issued vide
IBD Circular No. 1 of 2008 dated 02-Jan-
2008

3) IBD Circular No.02 of 2008 dated 25-

Mar-2008

4) AAOIFI Shariah Standard No.13 as

adopted vide IBD Circular No.01 of 2010
dated 12-Jan-2010

5) AAOIFI Shariah Standard No.12 as

adopted vide IBD Circular No.01 of 2013
dated 08-Apr-2013

Previous Reference:

Para 3(E) of Shariah Governance

Framework (SGF) for Islamic Banking
Institutions (IBIs) notified vide IBD Circular
No. 1 of 2015

Previous Reference:

1) IBD Circular No. 2 of 2014 dated April

03, 2014, read with

2) IBD Circular Letter No. 2 of 2014 dated

April 14, 2014

Previous Reference:

1) IBD Circular No. 3 of 2014 dated 04-

Apr-2014

Previous Reference:

1) IBD Circular No. 3 of 2014 dated 04-

Apr-2014

Previous Reference:

1) IBD Circular No. 2 of 2014 dated April

03, 2014
Previous Reference:

IBD Circular No. 2 of 2008 dated 25-Mar-

2008

Previous Reference:

1) IBD Circular No. 6 of 2007 dated 10-

Nov-2007

2) IBD Circular No. 2 of 2004 dated 29-

Apr-2004

AAOIFI Shariah Standard adopted:

17
AAOIFI Shariah Standard adopted:
12

Previous Reference:

Para 5 of Appendix-A to Annexure-1 of

IBD Circular No. 2 of 2008 dated 25-Mar-
2008

Previous Reference:

Para 8 of Appendix-A to Annexure-1 of

IBD Circular No. 2 of 2008 dated 25-Mar-
2008

Previous Reference:

Para H of Appendix 1 to Annexure-1 of

IBD Circular No. 2 of 2008 dated 25-Mar-
2008

Previous Reference:

‘Instructions for Profit & Loss Distribution

and Pool Management for Islamic Banking
Institutions (IBIs)’ issued vide IBD Circular
No. 3 of 2012 dated 19-Nov-2012
Previous Reference:

1) Para IV of annexure-II of IBD Circular

No. 2 of 2008 dated 25-Mar-2008 (stands
withdrawn)

2) BPRD Circular No. 7 of 2008 dated 30-

May-2008 (Provisions regarding minimum
rate of return on savings deposits shall no
more be applicable on IBIs)

Previous Reference:

Appendix A(1) of Annexure-1 of IBD

Circular No. 2 of 2008 dated 25-Mar-2008

Previous Reference:

Annexure -1 of IBD Circular No.2 of 2008

dated 25-Mar-2008 (Appendix-A-
Essentials of Islamic Modes-Murabaha,
sub clause vi)

Previous Reference:

1) BPRD Circular No. 3 of 2006 dated 05-

Jun-2006, read with

2) BPRD Circular No 38 of 1997 dated 10-

Nov-1997

Previous Reference:

Para C ‘Report of Shariah Advisor’,

Annexure - 1 Instructions for Shariah
Compliance, notified through IBD Circular
No. 2 dated 25th March, 2008

Previous Reference:

1) BPRD Circular No. 5 of 2010 dated 30-

Apr-2010, read with

2) BPD Circular NO. 33 of 2003 dated 02-

Oct-2003

3) Section ‘I’ of Annexure-I to IBD Circular

No. 2 of 2008 dated 25-Mar-2008
Previous Reference:

1) IBD Circular No. 2 of 2004 dated 29-

Apr-2004 on criteria for establishment of
Islamic Banking Division and opening of
standalone IBBs at conventional
commercial banks

2) BPRD Circular No. 15 of 2007 dated 12-

Oct-2007 on Branch Licensing Policy

AAOIFI Shariah Standards adopted:

3
8
9
13

Previous Reference:

Para F ’Essentials of Islamic Modes of

Financing’, Annexure-I –Instructions for
Shariah Compliance, notified through IBD
Circular No. 2 dated March 25, 2008

Previous Reference:

1) Clause 7 of Annexure-III of IBD Circular

No. 2 of 2004 dated 29-Apr-2004, read
with

2) BPRD Circular No.1 of 2003 dated 01-

Jan-2003

Previous Reference:

1) IBD Circular Letter No 1 of 2006 dated

05-May-2006

2) OSED Circular Letter No 1 of 2009

dated 27-Jan-2009

3) IBD Circular No 1 of 2009 dated 27-Jan-

2009
Previous Reference:

1) Islamic Financial Accounting Standard

for Ijarah IFAS – 2 notified by the SEC vide
SRO No. 431(I)/2007 dated May 22, 2007

02) Clause-V of Annexure 2 to IBD Circular

No 2 of 2008 dated 25-Mar-2008

Previous Reference:

IBD Circular No 2 of 2008 dated 25-Mar-

2008

Previous Reference:

01) IBD Circular No. 2 of 2007 dated

March 20, 2007

02) IBD Circular No. 4 of 2007 dated

August 16, 2007

Introduction of Shariah Compliance

instructions & guidelines by SBP

Introduction of Risk Management

guidelines for IBIs by SBP

Previous Reference:

Para 10(v) of Annexure III to IBD Circular

No.2 of 2004 dated 29-Apr-2004

Previous Reference:

IBD Circular Letter No. 2 of 2007, dated

May 28, 2007

Introduction of Guidelines for Islamic

Microfinance Business by SBP
Previous Reference:

IBD Circular No. 2 of 2007, dated 20-Mar-

2007
Previous Reference:

SRO No 865(I)/2005 dated August 24,

2005 issued by SECP

Previous Reference:

Circular Letter No. 1 of 2006, dated May

05, 2006

Previous Reference:

IBD Circular No.3 of 2004 dated October

26, 2004 (supressed by current circular)
on Fit & Proper Criteria of Shariah
Advisors of IBIs

Previous Reference:

1) BSD Circular No. 04 of 2005 dated July

16, 2005

2) BSD Circular No. 12 of 2003 dated

December 30, 2003

3) BSD Circular No. 01 of 2004 dated

January 07, 2004

Previous Reference:

Annexure-IV to IBD Circular No.2 of 2004

dated 29th April, 2004

Previous Reference:

BPD Circular No. 1 of 2003 dated 1st

January, 2003
Chronological Summary of SBP Circulars related to Islamic Banking

Sr. Circular No. Date

64 IFPD Circular No. 01 29-Aug-23

63 IBD Circular No. 01 4-Jul-22

62 IBD Circular No. 01 14-Jun-21

61 IBD Circular Letter No. 01 3-Feb-21

60 IBD Circular No. 04 2-Oct-20

59 IBD Circular No. 03 2-Sep-20

58 IBD Circular No. 02 29-Jul-20

57 IBD Circular Letter No. 02 23-Apr-20

56 IBD Circular No. 01 3-Jan-20

55 IBD Circular Letter No. 01 2-Jan-20

54 IBD Circular No. 01 1-Mar-19

53 IBD Circular No. 02 29-Jun-18

52 IBD Circular No. 01 7-Jun-18

51 IBD Circular Letter No. 01 11-Apr-18

50 IBD Circular No. 01 6-Jul-17

49 IBD Circular Letter No. 01 27-Mar-17

48 IBD Circular No. 01 8-Sep-16

47 IBD Circular Letter No. 01 12-Apr-16

46 IBD Circular Letter No. 01 30-Jun-15

45 IBD Circular No. 01 7-Apr-15

44 IBD Circular Letter No. 03 30-Sep-14

43 IBD Circular Letter No. 02 14-Apr-14

42 IBD Circular No. 03 4-Apr-14

41 IBD Circular No. 01 3-Apr-14

40 IBD Circular No. 02 3-Apr-14
39 IBD Circular Letter No. 01 26-Mar-14
38 IBD Circular No. 03 15-Jul-13
37 IBD Circular No. 01 8-Apr-13

36 IBD Circular No. 02 8-Apr-13

35 IBD Circular Letter No. 02 4-Jan-13

34 IBD Circular Letter No. 01 1-Jan-13

33 IBD Circular No. 03 19-Nov-12

32 IBD Circular No. 02 29-May-12

31 IBD Circular No. 01 6-Feb-12

30 IBD Circular Letter No. 01 8-Jul-11

29 IBD Circular Letter No. 01 6-Dec-10

28 IBD Circular No. 03 15-Jul-10

27 IBD Circular No. 02 25-Jun-10

26 IBD Circular No. 01 12-Jan-10

25 IBD Circular Letter No. 02 6-Jun-09

24 IBD Circular Letter No. 01 10-Apr-09
23 IBD Circular No. 01 27-Jan-09

22 IBD Circular No. 04 15-Nov-08

21 IBD Circular No. 03 17-Sep-08

20 IBD Circular No. 02 25-Mar-08

19 IBD Circular Letter No. 01 27-Feb-08

18 IBD Circular No. 01 2-Jan-08
17 IBD Circular Letter No. 05 29-Nov-07

16 IBD Circular No. 6 10-Nov-07

15 IBD Circular Letter No. 04 29-Oct-07
14 IBD Circular No. 5 10-Sep-07
13 IBD Circular No. 4 16-Aug-07
12 IBD Circular No. 3 11-Aug-07
11 IBD Circular Letter No. 03 2-Jul-07

10 IBD Circular Letter No. 02 28-May-07

9 IBD Circular No. 2 20-Mar-07

8 IBD Circular Letter No. 01 17-Mar-07

7 IBD Circular No. 1 5-Mar-07
6 IBD Circular Letter No. 1 5-May-06
5 IBD Circular No. 3 26-Oct-04

4 IBD Circular Letter No. 1 1-Jun-04

3 IBD Circular No. 2 29-Apr-04

2 IBD Circular No. 1 23-Apr-04

1 BPD Circular No. 1 1-Jan-03
irculars related to Islamic Banking

Subject

Adoption of 'Accounting and Auditing Organization for Islamic

Financial Institutions' (AAOIFI) Shariah Standards
Adoption of ‘Accounting and Auditing Organization for Islamic
Financial Institutions’ (AAOIFI) Shariah Standards
Shari'ah Non-Compliance Risk Management

Shari’ah Governance Framework (SGF) for Islamic Banking

Institutions (IBIs)
Guidelines and Criteria for Establishing Islamic Banking Institutions
(IBIs) and Commencement of Shariah Compliant Business and
Operations by Development Finance Institutions (DFIs)
Adoption of 'Accounting and Auditing Organization for Islamic
Financial Institutions' (AAOIFI) Shariah Standard(s)
Revised Instructions on Islamic Banking Windows (IBWs) Operations

Guidelines for Implementation of Regulatory Relief to Dampen the

Effects of COVID-19
Adoption of ‘Accounting and Auditing Organization for Islamic
Financial Institutions’ (AAOIFI) Shariah Standards
Enhanced Training & Capacity Building Measures for Islamic Banking
Institutions (IBIs)
Adoption of 'Accounting and Auditing Organization for Islamic
Financial Institutions' (AAOIFI) Shariah Standards
Enhanced Training & Capacity Building Measures for Islamic Banking
Institutions (IBIs)
Shari’ah Governance Framework (SGF) for Islamic Banking
Institutions (IBIs)

Change in nomenclature of ‘SBP Shariah Board’ to ‘Shariah Advisory

Committee’
Guidelines for Conversion of a Conventional Bank into an Islamic
Bank
External Shari’ah Audit Report (Para 7) - Shari’ah Governance
Framework for Islamic Banking Institutions (IBIs)
Exemption from KIBOR as Benchmark rate for Participatory and
Wakalah Modes Based Products
Report of Shari’ah Board – Para 3(E) of Shariah Governance
Framework
Shariah Compliant Solutions for Foreign Bill Discounting
Shari’ah Governance Framework for Islamic Banking Institutions
(IBIs)
Shariah Governance Framework for Islamic Banking Institutions (IBIs)

Shariah Compliant Solutions for Foreign Bill Discounting

Shari’ah Governance Framework for Islamic Banking Institutions
(IBIs)
Free-of-cost Priority Banking Services
Shariah Compliant Solutions for Foreign Bill Discounting
Islamic Banking Windows (IBWs)
Adoption of AAOIFI Shariah Standard No. 17 on ‘Investment Sukuk’
Adoption AAOIFI Shariah Standard No. 12 pertaining to ‘Sharika
(Musharaka) and Modern Corporations’
Shari’ah Standard on ‘Sharikat ul Milk and Diminishing Musharakah’

Introduction of New Products and Services

Instructions for Profit and Loss Distribution and Pool Management
for IBIs’ – Clarifications thereof
Instructions for Profit & Loss Distribution and Pool Management for
Islamic Banking Institutions
Accounting Treatment of Credit Murabaha

Invoice of Murabaha Transactions

Collection of Utility Bills After Due Date by Islamic Banking

Institutions (IBIs)
Presentation of Shariah Compliance Report to the Board of Directors

Rationalization / Discontinuation of Returns (Schedule of Service

Charges)
Criteria For Conversion of Conventional Banking Branches into
Islamic Banking Branches
Adoption of Shariah Standards Issued by Accounting and Auditing
Organization for Islamic Financial Institutions (AAOIFI)
Revision of Capital Adequacy Requirement (CAR) For IBB(s)
Submission of Returns to IBD-Revision of MSP
Implementation of Islamic Financial Accounting Standard for Ijarah
(IFAS 2)
Instructions and Guidelines for Shariah Compliance in Islamic
Banking Institutions
Fit and Proper Criteria for Shariah Advisors

Instructions and Guidelines For Shariah Complince in Islamic Banking

Institutions
Submission of Information regarding Sukuk Issued in Pakistan
Risk Management Guidelines for Islamic Banking Institutions
Declaration of Weightages & Profit Sharing Ratios

Information about Islamic Banking Windows

Submission of Returns to Islamic Banking Department
Guidelines for Islamic Microfinance Business
Fit & Proper Criteria for Shariah Advisors
Directive Under Section 41 of BCO, 1962
Islamic Financial Accounting Standard-1 Murabaha

Submission of Returns to Islamic Banking Department

Fit and Proper Criteria for Shariah Advisors

Data Based on Annual Audited Accounts

Salient Features of Products and Services
Submission of Returns to IBD
Fit and proper criteria for Shariah Advisors

Essentials and Model Agreements for Islamic Modes of Financing

Minimum Shariah Regulatory Standards

Contact Details of Islamic Banking Department

Policies For Promotion Of Islamic Banking
Keywords

AAOIFI Shariah Standards

AAOIFI Shariah Standards

Shariah Non Compliance Risk (SNCR)

Management
Shariah Governance Framework (SGF)

Criteria for establishing IBIs

Commencement of Shariah compliant
business
AAOIFI Shariah Standards

Islamic Banking Windows (IBWs)

COVID-19

AAOIFI Shariah Standards

Training & capacity building of IBIs

AAOIFI Shariah Standards

Training & capacity building of IBIs

Shariah Governance Framework (SGF)

Fit & proper criteria
Shariah Board
Shariah Advisors
RSBM

Shariah Board
Shariah Advisors
Conversion of conventional bank into
Islamic Bank
Shariah Governance Framework (SGF)

Exemption of KIBOR
Wakala mode based products
Shariah Governance Framework (SGF)

Foreign bill discounting

Shariah Governance Framework (SGF)

Shariah Governance Framework (SGF)

Foreign bill discounting

Shariah Governance Framework (SGF)

Priority banking services

Foreign bill discounting
Islamic Banking Windows (IBWs)
AAOIFI Shariah Standards
AAOIFI Shariah Standards

Shariah Standard
Shirkatul Milk
Diminishing Musharakah
Products & services
Pool management
Profit & loss distribution
Pool management
Profit & loss distribution
Accounting treatment
Credit Murabaha
Invoice of
Murabaha Transactions
Utility Bills Collection

Shariah compliance

Regularoty returns

Conversion of conventional branches into

Islamic branches
AAOIFI Shariah Standards

Capital Adequacy Requirement (CAR)

Regularoty returns
Islamic Financial Standard
Ijarah
Shariah compliance

Fit & proper Criteria

Shariah advisors
Shariah compliance

Regularoty returns
Risk Management in IBIs
Pool management
Profit & loss distribution
Weightages
Profit sharing ratio (PSR)

Islamic Banking Windows (IBWs)

Regularoty returns
Islamic microfinance business
Fit & proper Criteria
Shariah advisors
Advisory
Islamic financial Standard
Murabaha
Regularoty returns
Fit & proper Criteria
Shariah advisors
Regularoty returns
Products & services
Regularoty returns
Fit & proper Criteria
Shariah advisors
Islamic modes of financing
Agreements
Shariah compliance
Fit & proper Criteria
Contact details
Promotion of Islamic Banking
AAOIFI Shariah Standards Adopted by SBP

Sr. Circular No. Date of Adoption Shariah Standard No.

1 IBD Circular No. 01 2010 1/12/2010 3
2 IBD Circular No. 01 2010 1/12/2010 8
3 IBD Circular No. 01 2010 1/12/2010 9
4 IBD Circular No. 01 2010 1/12/2010 13
5 IBD Circular No. 01 2013 4/8/2013 12
6 IBD Circular No. 03 2013 7/15/2013 17
7 IBD Circular No. 01 2019 3/1/2019 2
8 IBD Circular No. 01 2019 3/1/2019 5
9 IBD Circular No. 01 2019 3/1/2019 14
10 IBD Circular No. 01 2019 3/1/2019 18
11 IBD Circular No. 01 2019 3/1/2019 24
12 IBD Circular No. 01 2019 3/1/2019 38
13 IBD Circular No. 01 2020 1/3/2020 19
14 IBD Circular No. 01 2020 1/3/2020 23
15 IBD Circular No. 01 2020 1/3/2020 28
16 IBD Circular No. 03 2020 9/2/2020 49
17 IBD Circular No. 01 2022 7/4/2022 10
18 IBD Circular No. 01 2022 7/4/2022 11
19 IBD Circular No. 01 2022 7/4/2022 25
20 IBD Circular No. 01 2022 7/4/2022 50
21 IFPD Circular No. 01 2023 8/29/2023 15
22 IFPD Circular No. 01 2023 8/29/2023 39
23 IFPD Circular No. 01 2023 8/29/2023 46
Title of Shariah Standard
Default in Payment by a Debtor
Murabaha to the Purchase Orderer
Ijarah & Ijarah Muntahia Bittamleek
Mudaraba
Sharika (Musharaka) and Modern Corporations’
Investment Sukuk
Debit Card, Charge Card and Credit Card
Guarantees
Documentary Credit
Possession (Qabd)
Syndicated Financing
Online Financial Dealings
Loan (Qard)
Agency and the Act of an Uncommissioned Agent (Fodooli)
Banking Services in Islamic Banks
Unilateral and Bilateral Promise
Salam and Parallel Salam
Istisna'a and Parallel Istisna'a
Combination of Contracts
Irrigation Partnership (Musaqat)
Ju'alah
Mortgage and its Contemporary Applications
Al-Wakalah Bi Al-Istithmar (Investment Agency)
Circulars related to Shariah Governance Framework

Sr. Circular No. Date

1 IBD Circular No. 03 4-Apr-14
2 IBD Circular Letter No. 03 30-Sep-14
3 IBD Circular No. 01 7-Apr-15
4 IBD Circular Letter No. 01 12-Apr-16
5 IBD Circular Letter No. 01 27-Mar-17

6 IBD Circular No. 01 7-Jun-18

7 IBD Circular Letter No. 01 3-Feb-21
vernance Framework

Subject
Shari’ah Governance Framework for Islamic Banking Institutions (IBIs)
Shariah Governance Framework for Islamic Banking Institutions (IBIs)
Shari’ah Governance Framework for Islamic Banking Institutions (IBIs)
Report of Shari’ah Board – Para 3(E) of Shariah Governance Framework
External Shari’ah Audit Report (Para 7) - Shari’ah Governance Framework for
Islamic Banking Institutions (IBIs)
Shari’ah Governance Framework (SGF) for Islamic Banking Institutions (IBIs)
Shari’ah Governance Framework (SGF) for Islamic Banking Institutions (IBIs)
Circulars related to Fit & Proper Criteria of Shariah Advisors

Sr. Circular No. Date Subject

1 IBD Circular No. 2 29-Apr-04 Minimum Shariah Regulatory Standards
2 IBD Circular No. 3 26-Oct-04 Fit and proper criteria for Shariah Advisors
3 IBD Circular No. 2 20-Mar-07 Fit and Proper Criteria for Shariah Advisors
4 IBD Circular No. 4 16-Aug-07 Fit & Proper Criteria for Shariah Advisors
5 IBD Circular No. 03 17-Sep-08 Fit and Proper Criteria for Shariah Advisors
6 IBD Circular No. 01 7-Jun-18 Shari’ah Governance Framework (SGF) for
Islamic Banking Institutions (IBIs)
Circulars related to Establishment & Conversion of Islamic Banking Institutions

Sr. Circular No. Date Subject

1 IBD Circular No. 02 25-Jun-10 Criteria For Conversion of Conventional Banking Branches into
Islamic Banking Branches
2 IBD Circular No. 01 6-Jul-17 Guidelines for Conversion of a Conventional Bank into an Islamic
Bank
3 IBD Circular No. 04 2-Oct-20 Guidelines and Criteria for Establishing Islamic Banking
Institutions (IBIs) and Commencement of Shariah Compliant
Business and Operations by Development Finance Institutions
(DFIs)
Circulars related to Regulatory Returns/ Reporting to be Submitted to SBP

Sr. Circular No. Date

1 IBD Circular Letter No. 1 5-May-06
2 IBD Circular Letter No. 01 17-Mar-07
3 IBD Circular Letter No. 02 28-May-07
4 IBD Circular Letter No. 04 29-Oct-07
5 IBD Circular Letter No. 01 27-Feb-08
6 IBD Circular Letter No. 01 10-Apr-09
7 IBD Circular No. 03 15-Jul-10
Returns/ Reporting to be Submitted to SBP

Subject
Submission of Returns to IBD
Data Based on Annual Audited Accounts
Submission of Returns to Islamic Banking Department
Submission of Returns to Islamic Banking Department
Submission of Information regarding Sukuk Issued in Pakistan
Submission of Returns to IBD-Revision of MSP
Rationalization / Discontinuation of Returns (Schedule of Service Charges)