KARACHI: State Bank of Pakistan (SBP) has revised the criteria for setting up of branches by Islamic banks.
According to a circular of the Central Bank issued here on Monday, (BPRD No. 08, 2011), it said that the branch licensing policy (BLPs) has been revised with immediate effect.
"In order to provide incentive to commercial banks for enhancing outreach of Islamic banking services, it has been decided to enhance the scope of Rural/Underserved Areas (RUAs) definition."
"Henceforth, any district having less than 10 Islamic Banking Branches (IBBs) will be termed as underserved with respect to Islamic banking facilities. Consequently, first 10 IBBs in such districts of Pakistan will fall under the BLPs definition of RUAs.
It further narrated the four scenarios for understanding the aforesaid criteria for RUAs.
SBP said that in each calendar year, only one IBB of a particular bank will be eligible to be treated as RUA in any particular district.
"This means, if some bank desires to open more than one IBBs in any particular district, then its first IBB will be treated as RUA branch and any subsequent number of branch(es) would be considered as normal branch(es)."
The SBP further said that these instructions will be effective immediately and respective banks are allowed to approach SBP within one month of the issuance of this circular for change/replacement of RUA locations (if desires so) with respect to new criteria.
"All other instructions on the subject shall remain unchanged," it added.
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