The State Bank of Pakistan (SBP) has announced adoption of three new Shariah Standards of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

With a view to further strengthen Shariah compliance framework and harmonize the Shariah practices in Islamic banking industry, the AAOIFI Shariah Standards No. 19 (Loan (Qard)), No 23 (Agency and the Act of an Uncommissioned Agent (Fodooli)), and No 28 (Banking Services in Islamic Banks) have been adopted with immediate effect subject to clarifications/amendments, SBP announced on Friday.

The adoption of the Standards is in addition to current regulations, other instructions and directives issued by SBP from time to time. SBP said that the failure to comply with these instructions may invoke penal action under the provisions of Banking Companies Ordinance 1962.