KARACHI

The State Bank of Pakistan has reiterated its commitment for promotion and development of Islamic banking in Pakistan. Due to persistent efforts of the State Bank and the Federal Government, the share of Islamic banking in total deposits of the banking industry has surged to 12.8pc as of 30th June, 2015 and is consistently growing with a cumulative average growth rate of over 50pc during the past 12 years. To-date 5 full fledge Islamic banks, one Islamic Banking Subsidiary and 17 banks with dedicated Islamic banking branches are operating in the country with over 1700 branches spread all over the country.

Under the close supervision of State Bank’s Shariah Board, Islamic banking in Pakistan is soundly founded on injunctions contained in the holy Quran and the Sunnah of the Holy Prophet (Peace and blessings of Allah be upon him).

State Bank has developed regulatory and supervisory framework to ensure Shariah compliance of Islamic banking based on rulings of its Shariah Board.

Further, it has developed Shariah compliant open market operations for managing liquidity of Islamic banking sector, which is quite unique in the Islamic world.

State Bank Shariah Board has also approved structure of Government of Pakistan Ijara Sukuk issued in the past and all such structures for future issues will be approved by SBP Shariah Board before their launch.

Meanwhile, State Bank of Pakistan has issued guidelines on Standardization of layout and Security features of POs and DDs. The move is aimed at addressing the risk of fraud, forging in Payment Orders (POs) and Demand Drafts (DDs) and to safeguard the interests of general public by reducing the risk of counterfeiting.

The said guidelines mandate the use of “Minimum Security Features” in the paper used in printing of POs and DDs comprising of Watermark, Anti-Forgery Ink, Ultraviolet Fibers etc. In the area of layout, Magnetic Ink Character Recognition (MICR) line, name of Drawee Bank Branch (in case of DD), maintenance of purchaser’s record by the respective bank branch etc. have been introduced.

Moreover, to facilitate customers, Banks/MFBs have been advised to devise a centralised mechanism for the verification of genuineness of POs and DDs.