| BPD
Circular No. 01 |
January
1, 2003
|
All
Banks
Dear
Sirs,
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 Commercial banks based on
Sharia 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, 2002, inter alia, a new clause (aa) 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 for setting up
of Islamic Banking 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, Licensing Requirements and other 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, may apply to the Director,
Banking 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
|
| Yours
faithfully,
(Muhammad Kamran Shehzad)
Director |
|
BPD
Circulars/ Circular Letters issued
in 2002
|
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