SBP expands SRL to 14pc for Islamic banks

KARACHI: A notification issued by the State Bank of Pakistan on Wednesday relating to statutory liquidity requirements (SLR) for Islamic banks said it had expanded the requirement to 14 percent of total demand liabilities, including time deposits with tenor of less than a year from April 1, to convert some of their cash holdings into financial papers, like treasury bills, Ijara Sukuk and other such instruments.

Analysts stated that the higher level of SLR may be beneficial for Islamic banks in the current circumstances as there is surplus liquidity in the system coupled with limited avenues for indirect investment.