SBP adopts standard to promote Islamic banking compliance
The State Bank of Pakistan (SBP) announced on Friday that it has officially adopted the Sharia standard issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) to standardize Sharia practices within the Islamic banking sector.
In a circular, the SBP stated, “To
further strengthen the Sharia compliance framework and harmonize practices
across the Islamic banking industry, AAOIFI Shariah Standard No. 47 (Rules for
Calculating Profit in Financial Transactions) has been adopted with immediate
effect, subject to any clarifications or amendments.”
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The Islamic banking sector saw
significant growth in assets and deposits during FY24. Over the past year, the
SBP also adopted 12 additional Sharia standards to reinforce the compliance
framework and align practices across domestic Islamic financial institutions.
Furthermore, the SBP is working closely with the industry and has formed a
steering committee to provide strategic guidance on converting conventional
banks to Islamic banks, in accordance with the 26th Constitutional Amendment
bill, which aims to eliminate all forms of 'riba' (interest) by January 2028.
Source: The News