The Presidents/Chief Executive Officers
All Islamic Banks and
All Conventional Banks having Islamic Banking Branches

Dear Sir,

Shariah Compliant Solutions for Foreign Bill Discounting

Please refer to IBD Circular No. 2 of 2014 dated April 03, 2014 wherein necessary instructions on the subject were issued.

2. In this regard, clause 1(i) of the aforesaid circular is revised and replaced with the following clause with immediate effect:

“The Salam of foreign currency is not a preferred transaction, however if some IBIs are interested in doing this transaction, the same shall be executed at the market rate of the day. For the purpose of such transactions, the market rate shall mean the exchange rate used to carry out normal ready transactions of at least USD 50,000 or more by the IBI with its clients. Further, the IBI’s Shariah Advisor (Shariah Boards from 1st Oct. 2014) shall ensure, through regular reviews that the exchange rate(s) applied in currency Salam transactions of any day are/is not different in any material way from the exchange rate(s) applied for ready transactions of USD 50,000 or more executed by the IBI during that day.”

3. The other instructions contained in the said circular shall remain the same.

4. Please acknowledge receipt.