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

Dear Sir/Madam,

Adoption of AAOIFI Shariah Standard No. 12 pertaining to ‘Sharika (Musharaka) and Modern Corporations’

                Please refer to Para 5 of Appendix-A to Annexure-1 of IBD Circular No. 2 of 2008 wherein essentials for carrying out ‘Musharaka’ were prescribed as ‘minimum requirements’ for Shariah compliance for Islamic Banking institutions (IBIs). To further strengthen the Shariah compliance framework and to harmonize the Shariah practices in Islamic banking industry, AAOIFI Shariah Standard No. 12 related to ‘Sharika (Musharaka) and Modern Corporations’ is adopted w.e.f July 01, 2013 subject to clarifications/amendments annexed herewith.     

2.            It may be noted that adoption of the Standard is in addition to current Prudential Regulations, guidelines and other circulars and directives issued by SBP from time to time and is not replacing them by any means.

3.            The IBIs shall ensure that all Sharika (Musharakah) facilities to be offered from 1st July 2013 are in conformity with the aforesaid AAOIFI Standard.  The failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.

      Please acknowledge receipt.

Encl: Annexure