The State Bank of Pakistan (SBP) has announced an updated mechanism for Mudarabah-based Financing Facilities (MFF), including Shariah-compliant Standing Ceiling Facility and Open Market Operations (OMO) injections, for Islamic Banking Institutions (IBIs).Â
According to a notification issued by the central bank, these facilities will now be available against GoP Ijara Sukuk (GIS), which is held in the Central Depository Company (CDC), ensuring a more structured approach to collateralised liquidity management.
Under the new framework, IBIs must pledge GIS (CDC) as collateral in favor of SBP through the Central Depository System (CDS) using designated Group IDs. The SBP has introduced two group classifications for these facilities: the Ceiling Facility (Group ID: 2025-30) and OMO Injection (Group ID: 2025-29).
For IBIs to avail financing, the market value of their collateral must match the financing amount, expected profit, and an applicable haircut determined by SBP. The valuation of GIS (CDC) will be based on Financial Market Association of Pakistan (FMA) revaluation rates from the last working day before the request.
The pledged collateral will be excluded from IBIs’ Statutory Liquidity Requirement (SLR) for the duration of the facility. Once a deal is confirmed, SBP will transfer funds to the IBIs’ accounts.Â
Upon maturity, the SBP will recover the financing amount and profit before releasing pledged securities.
Additionally, DMMD Circular No. 9 of 2024 will apply to Mudarabah-based financing under the updated guidelines. SBP has instructed IBIs availing MFF to submit a revised deal confirmation letter (Annexure A), signed by authorised signatories, to the Chief Manager, SBP (BSC) Karachi Office.
This initiative aligns with SBP’s broader efforts to enhance Shariah-compliant liquidity solutions while ensuring smooth operations in Islamic banking and financial markets.
