Business Desk 
Nov 26, 2024
The State Bank of Pakistan (SBP) has announced that Islamic Banking Institutions (IBIs) will pay profit on their PKR saving deposits equivalent to at least 75% of the weighted average gross yield of all their pools.
The announcement excludes deposits from financial institutions, public sector enterprises, and public limited companies.
To calculate the gross yield for each pool, the monthly gross earnings will be divided by the monthly average assets of the pool, excluding fixed assets. However, pools established for Shariah-compliant standing ceiling facilities and open market operations (OMOs) will not be considered when determining the weighted average gross yield.
The following revisions have been updated into the existing “Instructions for Profit & Loss Distribution and Pool Management for IBIs,” initially outlined in IBD Circular No. 03 (November 19, 2012) and further clarified through IBD Circular Letter No. 01 (January 1, 2013).
- Clause 4.2.3 shall stand deleted.
- Clause 5.2.1 shall be replaced with “IBI may forego a part of its Mudarib share as hiba to meet the market expectation in case of lower than expected/market returns earned by the pool. However, IBIs maintaining PER will reduce their Mudarib share only if the PER is insufficient to improve the profit payouts to the depositors.”
- Clause 5.2.2 shall be replaced with “If needed, IBIs may give hiba to saving account depositors to meet the requirement of minimum profit rate.”
The aforementioned instructions will be implemented from January 01, 2025.
