Circulars/Notifications - Islamic Banking Department

June 25, 2010

The Presidents /Heads of

All Islamic Banking Institutions

Dear Sirs,

CRITERIA FOR CONVERSION OF CONVENTIONAL BANKING BRANCHES

INTO ISLAMIC BANKING BRANCHES

1. 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 Islamic Banking Branches (IBBs) at 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 conventional banking branches into 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, the detailed criteria has been 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 criteria and submit the same to SBP for in-principle approval and grant of license for Islamic banking branches.

Please acknowledge receipt.