Pakistan adopts AAOIFI standards for investment sukuk
Pakistan’s central bank has adopted the “investment sukuk” guidelines of the Bahrain-based Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). Issuers will have to comply with this global standard for sukuk, or face penalties. The action could help Pakistani issues attract investment by foreign institutions from the Gulf and elsewhere. Around the world, the industry commonly refers to AAOIFI standards but they are mostly used as guidelines rather than manadatory rules. Pakistan’s regulators are rolling out new rules in an effort to increase Islamic banks’ share of the total banking sector to 15 percent by 2017. In May, the country’s securities commission established a sharia advisory board to oversee Islamic financial instruments, while last year it announced rules for sukuk, takaful (Islamic insurance) and Islamic deposits.