Circulars/Notifications - Agricultural Credit Department  

 AC&MFD Circular No. 03 of 2011
October 18, 2011 

The Presidents/CEOs
All Islamic Banking Institutions (IBIs)

Dear Sir,

Islamic Agricultural Financing for Farm/Crop Production Purposes under Salam

While reviewing the implementation status of SBP guidelines on Islamic financing for agriculture issued vide ACD Circular No. 1 dated 3rd February, 2009, it has been observed that difficulties are being faced by IBIs in development of specific products for farm and non-farm sector activities.

Therefore, to further facilitate IBIs and to improve the access of agricultural Islamic financing to the farming community, attached model product based on ‘Salam’ has been developed in consultation with stakeholders. The product has covered the Sharia related aspects as well as business cycle and financing requirements of farm/ crop production activities. The product is supported by practical examples and process flow of the Salam transaction.  

IBIs may adopt the model product in the present form or with some adjustments to suit their organizational & operational needs and market characteristics, subject to compliance with SBP regulations and approval from their Shariah Advisor.

Further, IBIs are advised to ensure that their relevant staff possesses the requisite knowledge and expertise about the product. They should also launch awareness campaigns through electronics & print media, seminars, workshops, etc to ensure that their clients/ farmers are fully educated about the product and familiar with the requirements like documentation, loan limit, process flow/ procedure, etc.

Please acknowledge the receipt.

Encls: As above

Yours faithfully,


(Syed Samar Hasnain)

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