Regulatory Alerts2026-06-16 | IFPD Circular Letter No. 03Added · Updated
SBP Guidelines for Facilitating 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 branches, 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 and provide a 30-day window for consent, while permitting deemed acceptance for individual current accounts under strict conditions excluding non-Muslims and dormant accounts. The guidelines authorize temporary virtual cost centres for unconvertible portfolios for one year and permit Islamic branches to report to conventional sides with Board approval, subject to specific Shariah compliance and audit requirements.
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