All Banks.

Dear Sirs,

Minimum Shariah Regulatory Standards

In order to promote Islamic Banking in Pakistan it has become necessary that Guidelines issued vide BPD Circular # 1 dated 1st January, 2003 be modified and a uniform policy pertaining to minimum Shariah regulatory standards for Islamic Banks, Islamic Banking Subsidiaries and Islamic Banking Branches be issued.

The minimum Shariah regulatory standards and the “Fit and Proper Criteria” framed for selection of the Shariah Advisor, duly approved by the SBP Shariah Board, have been incorporated in the Guidelines and are attached as annexure I, II, III and IV to this Circular. Banks carrying out Islamic banking operations should enforce the Fit and Proper Criteria positively by 30th June, 2004 or those who wish to start such operations as laid down in the guidelines should follow the instructions in both letter and spirit. Failure to comply with these instructions will result in penalty under the provisions of BCO. 1962.

Kindly acknowledge receipt.