SIBL applies to SECP for conversion into Shariah-compliant bank

ISLAMABAD: Security Investment Bank Limited (SIBL) has applied to the Securities and Exchange Commission of Pakistan (SECP) for conversion into a Shariah-compliant investment bank.

After the announcement of the Federal Shariat Court Judgement last year, the Securities and Exchange Commission of Pakistan (SECP) has issued comprehensive Guidelines for Offering Islamic Financial Services, 2023, paving way for transformation of a regulated person/entity into full-fledged Islamic institution. Subsequent to issuance of these guidelines, Security Investment Bank Limited (SIBL) has applied for conversion into a Shariah-compliant investment bank.

SIBL is a public limited company listed on the Pakistan Stock Exchange and licensed to carry out investment finance services as a Non-Banking Finance Company (NBFC) under the Companies Act, 2017.

SIBL has made a public disclosure at the PSX, and applied to the SECP for a certificate as a Shariah-compliant company under Section 451 of the Companies Act, 2017, read with the Shariah Governance Regulations, 2018.

This conversion will be a multi-stage process, and SECP will ensure a smooth transition with minimal disruption to the customers of SIBL.

In view of the growing demand for Shariah compliant financial services, and in light of constitutional requirement to eliminate the Riba from the economy, SECP is geared towards facilitating its regulated entities desirous of converting to Shariah compliant status.

In the event that a conventional financial institution intends to convert itself into an Islamic financial institution, either all at once or in phases, it may do so through the following process: (i) initiate the conversion process with the approval of the board of directors; (ii) form a dedicated team, function, or department to prepare the conversion plan and spearhead conversion activities; (iii) prepare a conversion plan in light of the Shariah principles and rules and the Shariah screening criteria provided in the Shariah Governance Regulations, 2018; (iv) appoint or engage a Shariah supervisory board to review and vet the conversion plan and oversee its implementation; (v) obtain approval of the conversion plan from the board of directors, if required, and may voluntarily intimate the Commission for information and (vi) appropriately disclose the approved conversion plan to the relevant stakeholders, SECP added.

Copyright Business Recorder, 2023