The
State Bank of Pakistan (SBP) has given the green signal for Islamic
Banking Windows (IBWs) to offer all types of financing products to their
customers.
SBP on Wednesday issued revised instructions for banks to expand the
scope of operations of IBWs. Under the revised instructions, IBWs can
now offer all types of financing products to their customers including
Corporates, SMEs, Agriculture, Housing, and Consumers.
State Bank said that conventional banks can open IBWs, which are
dedicated counters in conventional branches, after getting permission
from SBP; however, these were not allowed to offer any financing
products.
However, this facility is subject to the condition that the
respective IBW branch shall be converted into a full-fledged Islamic
banking branch within a period of three years.
In this context, all conventional banks already having IBWs shall
submit their duly approved ‘IBWs Policy’ to the Islamic Banking
Department, State Bank of Pakistan as per instructions within three
months of issuance of this circular.
IBBs operating or desiring to operate IBWs shall develop a Policy (or
revise existing one, if any) containing details on functioning of IBWs
duly approved by their Shariah Board (SB) and BoD before approaching SBP
for permission.
At present, Islamic banking products and services are being offered
by full-fledged Islamic banks, Islamic banking subsidiaries and Islamic
banking branches of conventional banks after getting approval/license
from SBP.
The central bank was of the view that with 1,400 IBWs of 11 banks
currently operational in the country, their potential to improve access
to finance will increase significantly. “Further, it will contribute
towards increase in financial inclusion through provision of Shariah
compliant financing facilities to vast majority of population.”
The revised instructions also incorporate different amendments or
additions to existing regulations and include policy formulation on
IBWs, submission of annual IBWs expansion plan, physical setup &
display requirements for IBWs, opening & closure of IBWs, their fee
structure, and revisions in reporting requirements.
“It is expected that this new policy measure will contribute towards
achieving the targets set under National Financial Inclusion Strategy
for Islamic banking, which envisages attaining a share of 25 percent in
total assets and deposits of the banking industry and 30pc share in
total branch network of the industry by the end of 2023,” said SBP.
Research:https://www.brecorder.com/news/40008598/sbp-allows-islamic-banking-windows-to-offer-all-types-of-financing-products
