New rules for IBIs
Until now, rules and procedures Islamic Banking Institutions (IBIs) in Pakistan have been following were too general and occasionally not sufficiently specific. In fact, they were not much different from the conventional banking in terms of rate of return on deposits. However, on 19th November a landmark was set by the issuance of detailed instructions by the State Bank.
The instructions will serve to improve transparency and disclosures and bring standardisation in the IBIs' profit and loss distribution policies and practices. As the instructions determine, each pool of deposits established by IBIs would play the role of a virtual enterprise. It will have explicitly demarcated sources of funds, ownership of specific assets and income and expenses.