In supersession of BPRD Circular No. 14 dated 16^th June 1998, as amended from time to time and subsequent instructions issued on that subject, it has been decided that, effective immediately, the Banks/DFIs shall determine on their own the returns payable to investors and other depositors of funds with them. The banks/DFIs are reminded to ensure that returns are paid strictly in accordance with the principles of Shariah and after they have fully met and provided for all the actual and accrued expenses of the related period. In this context, the banks/DFIs:

 a).         shall obtain a certificate from their external auditors within five months of the close of their accounting year, for the half year ending June/December each year, and keep it in their record to be inspected by the SBP’s inspection teams.

 b).         Islamic Banks/Islamic Banking Branches of existing banks will obtain a certificate from their external auditors on annual basis that the profit distributed among the depositors has been calculated in accordance with the policy approved by their Shariah Board or Shariah Advisor/Committee, as the case may be.

 b).         The banks/DFIs shall ensure that returns on investment /deposits are declared and paid within 20 days of closing of the half year to which they relate.  

 Please acknowledge receipt.