SBP allows Islamic banks to set up separate PRISM

KARACHI: The State Bank of Pakistan (SBP) on Monday allowed Islamic banking branches of conventional banks to establish a separate Pakistan Real-Time Interbank Settlement Mechanism (PRISM).

The move is aimed to  improve the efficiency of the financial services of the banking system and enhance the outreach of electronic transfer of large value funds, the central bank said in a circular.

"The Islamic banking branches shall maintain the adequate funds in their current accounts with the SBP Banking Services Corporation," it added. The State Bank of Pakistan said the Islamic banking branches would be required to establish funding arrangements, credit lines through Islamic modes in compliance with the relevant rules and regulations with direct participants of Pakistan Real-Time Interbank Settlement Mechanism, enabling banks to replenish Islamic branch settlement accounts as and when required within stipulated time.