Regulatory Alerts2026-06-12 | IFPD Circular No. 01 of 2026Added
Placement of Funds of Islamic Banking Institutions with Conventional Parent or Head Office
Islamic Banking Institutions are prohibited from placing funds with their conventional parent or head office based on the contract of loan (Qard) or any other form of subsidized financing. Any existing placements under these arrangements must be withdrawn with immediate effect. This prohibition does not apply to funds placed at the Head office for meeting regulatory requirements.
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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
46951
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 However, any such existing placements, if already executed, should be withdrawn with immediate effect.
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Moreover, the above instructions are not applicable on funds placed at Head office for meeting any regulatory requirements.
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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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