Regulatory Alerts2026-06-12 | IFPD Circular No. 01Prohibition on Placement of Islamic Banking Funds with Conventional Parent or Head Office
The Islamic Finance Policy Department issued Circular No. 01 of 2026 to prohibit Islamic Banking Institutions from placing funds with their conventional parent or head office under loan (Qard) or subsidized financing contracts. This directive mandates the immediate withdrawal of any such existing placements, while explicitly exempting funds held to meet regulatory requirements. The order is issued under the authority of Section 39H of the Banking Companies Ordinance, 1962.
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