SBP issues Islamic refinance schemes

KARACHI: The State Bank of Pakistan (SBP) has issued three Shariah-compliant refinance schemes that are expected to provide level-playing field to the Islamic banking industry, a statement said on Friday.

Currently, the central bank offers various subsidised refinance facilities to the banks / DFIs to channelise the funds into priority sectors, it added. Shariah-compliant Islamic export refinance facility and Islamic long-term financing facility for the exporters are available to the Islamic banking industry.

However, addition of Islamic financing facility for renewable energy, financing facility for storage of agricultural produce and refinance facility for modernisation of SMEs will meet the long awaited demand of the industry, especially for the agriculture and SME sectors, the statement said.

Mudarabah-based facilities would provide long-term cheaper liquidity to the end users. The financing under Islamic financing facility for renewable energy will be available in two categories. These are prospective sponsors desirous of setting up renewable energy power projects with capacity ranging between 1MW to 50MW, and consumers willing to install facility using renewable energy source for generation of electricity ranging between 4KW to 1MW for own use and / or for supplying to the distribution company.