Lahore: The State Bank of Pakistan (SBP) on Wednesday allowed banks to expand the operations of their Islamic Banking Window facilities, a news source reported. To this effect, it has given its green signal to banks to allow these windows to provide all types of financing products to customers.
As per new instructions, the Islamic Banking Windows (IBWs) would now offer financing products pertaining to corporations, SMEs, housing, agriculture, and consumers. Previously, conventional banks had the permission to open these dedicated counters but these could not offer financing products.
SBP has provided the new facility subject to the condition that the respective IBW becomes a full-fledged Islamic banking branch within three years. In this regard, the banks that already have these windows must submit their IBW policy to the central bank within three months of this notification. Meanwhile, those banks desiring to operate IBWs must prepare a policy and get it approved from their Shariah Board and Board of Directors before submitting to the SBP.
SBPs revised instructions also include several amendments or additions to existing regulations and policy formulation on IBWs, submission of annual expansion plan, display requirements and physical setup, opening and closure of the windows, fee structure, and revisions in reporting requirements.
SBP officials opined that this facility would allow more financial inclusion by providing Shariah-compliant financing products to a vast majority of the country’s population.
