The State Bank of Pakistan on Monday said that Karachi Shipyard & Engineering Works (KSEW) Sukuk (bonds) worth Rs 1.5 billion would be regarded as ''''Approved Security'''' for Islamic banks to meet the condition of Statutory Liquidity Requirement (SLR).
The SBP on Monday issued BSD Circular No 02 of 2008 addressed to the presidents/chief executive officers of all Islamic banks/branches. The SBP has taken this step to give relaxation to the Islamic banks, as due to the unavailability of Islamic treasury bills (Baitul Maal bonds) the Islamic banks were facing difficulties to meet the SLR.
"In terms of Govt. of Pakistan notification No 5 (I) GS/2005-149 dated 22nd January, 2008, KSEW Sukuks 1st issue has been notified as an Approved Security for Islamic Banks (IBs)/Islamic Banking Branches (IBBs), for the purpose of Statutory Liquidity Requirement (SLR) under sub-section (1) of section 29 and sub-section (2) of section 13 of the Banking Companies Ordinance, 1962," the circular said.
"However, overall Sukuk holdings for SLR shall not exceed 5 percent of the Time and Demand Liabilities of the IBs/IBBs, as the case may be," the SBP circular said, and added that all other instructions on the subject would remain the same.