The Presidents / CEOs
Islamic Banks /Heads Islamic Banking Divisions

Dear Sirs

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 has been observed that only few Institutions offering Islamic Banking are regularly updating weightages & Profit sharing ratios, before beginning of the period concerned, on their websites; which is not an encouraging situation. Therefore all Institutions offering Islamic Banking are advised to make sure that relevant weightages and ratios are updated regularly, before start of the period concerned, 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 ratios must be available on website.

2. The statement declaring weightages & Profit sharing ratios must at the minimum contain date of declaration, period for which they remain effective, all categories/pools & bank’s equity 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 Circular Letter.