July 01, 2024 (MLN): In pursuance of State Bank of Pakistan Vison 2028 and to facilitate banks in their conversion from conventional to Islamic, SBP has developed broad guiding parameters which will help banks to devise their own conversion plans.
According to a circular issued by the SBP’s Islamic Finance Policy Department, banks may consider following broad parameters to prepare their conversion plans:
Vision and strategy
Governance structure
Business conversion milestones and timelines (internal milestones for conversion of assets, deposits, financing, investments, syndicated transactions and non-funded portfolio and branches, etc.)
Gap analysis with respect to policies, products and services, infrastructural requirements, human resources, identification of issues/challenges, potential areas to work on to achieve target of conversion, etc.
On-boarding employees of the bank and strategy for their training and capacity building
Communication plan with stakeholders (internal and external)
Customer facilitation (awareness creation and information sharing with bank’s customers and complaint handling mechanism)
The banks may approach Islamic Finance Policy Department, SBP for further guidance on the subject, the circular further reads.
