State Bank issues revised framework for Islamic banks

KARACHI: The State Bank of Pakistan (SBP) on Friday developed a revised Shariah governance framework for the Islamic banking institutions to strengthen the Shariah compliance environment of the Islamic banking industry. The framework will come into force with immediate effect.

“In view of the industry practices and considering the feedback received from various quarters, the framework has been further refined and is being issued for compliance by Islamic banking institutions (IBIs),” said the SBP in a circular.

The IBIs are advised to make all the necessary arrangements to comply with the requirements of the framework and submit compliance status to Islamic Banking Department by July 31, 2018.

The objective of the framework is to define the roles and responsibilities of various organs of IBIs, including the board of directors, executive management, Shariah board, Shariah compliance department, product development, internal auditors and external auditors towards Shariah compliance.

The SBP said a sound and effective Islamic compliance framework is critically important to give confidence to the general public about Shariah conformity of the Islamic banks’ products and services.