KARACHI: In order to further strengthen Shariah compliance framework and harmonise the Shariah practices in Islamic banking industry (IBI), the State Bank of Pakistan (SBP) has announced adoption of six new AAOIFI Shariah Standards with immediate effect.
As per SBP’s directives, Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) Shariah Standards No 4 relate to Settlement of Debts by Set-Off, No 7 for Hawalah, No 16 for Commercial Papers, No 22 on Concession Contracts, No 48 on Options to Terminate Due to Breach of Trust (Trust Based Options), No 51 relate to Options to Revoke Contracts due to Incomplete Performance and No 52 on Options to Reconsider (Cooling-Off Options, Either-Or Options, and Options to Revoke due to Non Payment) have been adopted to standardise and harmonise Shariah practices in Islamic Banking Institutions.
These Shariah Standards are applicable with the clarifications and amendments made by the SBP and in addition to applicable regulations, instructions and directives issued by SBP from time to time.
The SBP has warned that failure to comply with these instructions may invoke penal action under the relevant provisions of the Banking Companies Ordinance 1962.
Copyright Business Recorder, 2024
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