The State Bank of Pakistan (SBP) has announced adoption of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Shariah standards. With a view to further strengthening Shariah compliance framework and harmonize the Shariah practices in Islamic banking industry, the AAOIFI Shariah Standards No. 2 relating to debit card, charge card and credit card, Standard No. 5 on guarantees, Standard No. 14 on documentary credit, No. 18 on possession, No. 24 on syndicated financing and No. 38 on online financial dealings have been adopted with immediate effect subject to clarifications/amendments. The adoption of the standards is in addition to current regulations, other instructions and directives issued by SBP from time to time and are not replacing them by any means.
The SBP has warned all Islamic banks, Islamic banking subsidiaries and all conventional banks having Islamic banking branches that failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.