Regulatory Alerts2026-06-16 | IFPD Circular Letter No. 03 of 2026Added · Updated
Facilitation in conversion of conventional banking branches into Islamic banking branches
The State Bank of Pakistan revised the criteria for conventional banks to convert branches into Islamic banking units, eliminating licensing fees and allowing applications via an Annual Branch Conversion Plan or case-by-case requests. Banks must notify customers at least two months in advance, provide a 30-day consent window, and handle dissenting accounts by transferring them to conventional branches or parking them in a temporary virtual cost centre. The rules permit deemed acceptance for individual current accounts under strict conditions, prohibit conversion of non-Muslim accounts without explicit consent, and mandate Shariah Board approval for reporting structures and virtual cost centre operations.
Topics
islamic-finance
licensing
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