The President/Chief Executive
All Islamic banks / Banks having Islamic Banking Branches

Dear Sir/Madam,

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 No. 431(I)/2007 dated May 22, 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 December 31, 2008, it has been decided to allow implementation of this standard w.e.f January 01, 2009. Accordingly, IBIs shall ensure that henceforth all returns/statements submitted to State Bank as well as the Quarterly/Annual Financial Statements shall be prepared in line with this Standard.

Please acknowledge receipt.