Placement of Funds of Islamic Banking Institutions with Conventional Parent or Head Office — SBP — PK

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IFPD Circular No. 01

Placement of Funds of Islamic Banking Institutions (IBIs) with Conventional Parent or Head Office based on the Contract of Loan (Qard) or any other form of Subsidized Financing

June 12, 2026

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The Presidents/Chief Executives All Conventional Banks having Islamic Banking Branches

Dear Sir/Madam,

Placement of Funds of Islamic Banking Institutions (IBIs) with Conventional Parent or Head Office based on the Contract of Loan (Qard) or any other form of Subsidized Financing

In terms of the powers conferred under Section 39H of the Banking Companies Ordinance, 1962, it is clarified that Islamic Banking Institutions (IBIs) are not permitted to place any funds with their conventional parent or head office based on the contract of loan (Qard) or any other form of subsidized financing. However, any such existing placements, if already executed, should be withdrawn with immediate effect.

Moreover, the above instructions are not applicable on funds placed at Head office for meeting any regulatory requirements.
Please acknowledge receipt.

Yours sincerely,

Dr. Zahid Ur Rehman Khokher Director

Home — Circulars — IFPD Circular No. 01

Placement of Funds of Islamic Banking Institutions (IBIs) with Conventional Parent or Head Office based on the Contract of Loan (Qard) or any other form of Subsidized Financing

June 12, 2026

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Banking Companies Ordinance, 1962Not in RegAlert
“In terms of the powers conferred under Section 39H of the Banking Companies Ordinance, 1962, it is clarified that Islamic Banking Institutions (IBIs) are not permitted to place any funds with their conventional parent or head office based …”