KARACHI: The State Bank of Pakistan (SBP) has eased the process for converting conventional bank branches into Islamic banking branches by shortening the mandatory public notification period and reducing the interval between notices issued to current account holders.
The revised criteria, which took effect immediately, are aimed at facilitating banks in accelerating the transition to Islamic banking.
With a view to further facilitate banks in conversion of their branches, SBP has amend the existing criteria for conversion of conventional banking branches into Islamic banking branches keeping in view the industry’s needs and issues emerged from time to time.
As per revised criteria, the time period for informing the general public and account holders about the conversion of conventional branches has been reduced from three and a half months to two months.
“The banks will inform the general public and account holders about conversion of its respective conventional branches into Islamic at least two months before the conversion, though publication of notices in leading newspapers (both in Urdu and English), display of notices in all branches and notice on bank’s website or by any other banking channel used by account holders,” as per revised criteria.
Moreover, the time interval for issuance of two notices for conversion of current accounts on a deemed acceptance basis has been reduced from 30 days to 15 days.
The bank shall send notice(s) to the account holders at least ‘2’ times with a 15 days interval, before the effective date of conversion (both in English & Urdu languages). The last notice about changes in terms and conditions including cut-off date(s) for conversion of account on deemed acceptance basis, will be given to the account holders at least 15 days before the effective date of conversion, the SBP said.
The changes will take effect immediately, however, all other instructions on the subject shall, however, remain unchanged.
As per criteria, the banks are required to submit their Annual Branch Conversion Plan (ABCP) aligned with its overall conversion plan along with a specific request for in-principle approval to convert its conventional branches into Islamic to Banking Policy & Regulations Department (BPRD) with a copy to Islamic Finance Policy Department (IFPD), SBP by 31st October of each preceding calendar year.
Besides ABCP, bank may also approach SBP for approval of conversion of its conventional branches any time on a case-to-case basis.
All conventional banks having Islamic operations or those who intend to start Islamic banking operations will be eligible to apply for conversion of its existing conventional branches into Islamic. However, no licensing fee will be applicable on conversion of conventional branches into Islamic.
Copyright Business Recorder, 2026
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