In terms of the powers conferred under Section 39H of the Banking Companies Ordinance, 1962, it is clarified that Islamic Banking Institutions (IBIs) are not permitted to place any funds with their conventional parent or head office based on the contract of loan (Qard) or any other form of subsidized financing. However, any such existing placements, if already executed, should be withdrawn with immediate effect.
2. Moreover, the above instructions are not applicable on funds placed at Head office for meeting any regulatory requirements.
3. Please acknowledge receipt.