ISLAMABAD -  The Religious Board constituted by the federal government for the Securities and Exchange Commission of Pakistan (SECP) has approved the prospectuses of two new modarabas, Habib Metro Modaraba and Orient Rental Modaraba.

The Board certified that the business specified in the prospectuses of both Habib Metro Modaraba and Orient Rental Modaraba is not opposed to the injunctions of Islam. The meeting was presided over by Justice (R) Khalil-ur-Rehman Khan, chairman of the Board. The Religious Board was constituted by the federal government for the SECP under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980.

The Habib Metropolitan Modaraba Management Company (Pvt) Limited has proposed to float a new modaraba with the paid-up modaraba funds of Rs300 million. It shall be a perpetual, multipurpose and financial services modaraba. It will primarily provide car-financing solutions to various individuals and corporate customers based on RV car financing model.

In the RV car financing, the monthly rentals are significantly lower than the regular Ijarah financing mode. In addition to RV car financing, it will provide solar power solutions to its customers based on ijarah/rental/ musharakah or any other approved modes of financing.

Orient Rental Modaraba will be floated by EMAN Management (Pvt) Limited, with the authorised and paid-up modaraba funds of Rs500 million. It shall also be a perpetual and multipurpose modaraba, primarily focusing on rental business of generators and heavy machinery, etc.

These modarabas shall not engage in riba-based transactions. They shall conduct their businesses in accordance with the modaraba regulatory framework, Sharia Audit and Sharia compliance mechanism, object clause of their prospectuses, principles of Sharia and on the basis of model financing agreements already approved by the Board. They shall also appoint Sharia advisers to have their guidance and Sharia certification of their day-to-day business transactions.

The modaraba certificates of both modarabas shall be listed on the Pakistan Stock Exchange. Consequently, a new investment of Rs800m shall be coming to the capital market. It is expected that these modarabas will promote the modaraba sector and attract the public to invest in Islamic financial institutions. The SECP reiterates that it is firmly committed to promoting Islamic finance in the country.