SBP aligns regulatory framework with Shariah principles under Vision 2028

The State Bank of Pakistan has told all banks, MFBs and DFIs to read conventional banking terms alongside their Islamic finance equivalents. The circular, sent to chief executives and presidents, links the change to SBP Vision 2028 and its goal of bringing the rulebook into line with Shariah principles. Mettis Global reported the notice on August 21, 2026.

Annexure-III lists 21 terms that institutions must now read in dual form, pairing interest with return, loan with loan/financing, borrower with borrower/obligor and TFC with TFC/Sukuk. These insertions extend beyond the regulations and FE Manual chapters named in the first two annexures, reaching any other SBP rule or manual chapter that concerns Islamic banking.

Annexure-I covers a broad range of rules, from capital adequacy and farm credit to consumer loans, housing and SME lending and payment systems. Annexure-II, by contrast, deals with 14 FE Manual chapters on FX forwards, nostro accounts, remittances, exports and imports. SBP stressed that only the insertions and Shariah alternatives in Annexure-III are being changed, and all other wording stays the same.