Modaraba regulations

Published April 25, 2015
Regulations aim to provide a level-playing field to modarabas with all other participants of non-bank financial sector.  -Reuters/File
Regulations aim to provide a level-playing field to modarabas with all other participants of non-bank financial sector. -Reuters/File

ISLAMABAD: The Secu­rities and Exchange Comm­ission of Pakistan (SECP) on Friday notified the draft of Modaraba Regulations 2015.

The regulations are aimed at providing a level-playing field to modarabas with all other participants of non-bank financial sector.

Comprehensive provisions have also been introduced to prevent the criminal use of modaraba institutions for money laundering or any other unlawful activities.

The new regulations envisage various risk management measures, which mainly include minimum conditions for grant of finance, various restrictions on certain types of transactions as well as proper criteria for appointment of chief executive and directors of modaraba companies.

The Shariah-compliant audit mechanism has been made part of the draft regulations to ensure that day-to-day business transactions of modarabas are in conformity with the injunctions of Islam.

Permission for fundraising has been linked with the minimum equity requirement of Rs250 million, satisfactory financial performance, acceptable grade credit rating and satisfactory fiduciary conduct of the chief executive and directors of modarabas.

The classification and provisioning criteria for non-performing assets has been reviewed and brought in line with the other players of NBF sector.

The draft regulations have been circulated among all relevant quarters, and have also been placed on SECP’s website.

Published in Dawn, April 25th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

First steps
Updated 29 May, 2024

First steps

One hopes that this small change will pave the way for bigger things.
Rafah inferno
29 May, 2024

Rafah inferno

THE level of barbarity witnessed in Sunday’s Israeli air strike targeting a refugee camp in Rafah is shocking even...
On a whim
29 May, 2024

On a whim

THE sudden declaration of May 28 as a public holiday to observe Youm-i-Takbeer — the anniversary of Pakistan’s...
Afghan puzzle
Updated 28 May, 2024

Afghan puzzle

Unless these elements are neutralised, it will not be possible to have the upper hand over terrorist groups.
Attacking minorities
28 May, 2024

Attacking minorities

Mobs turn into executioners due to the authorities’ helplessness before these elements.
Persistent scourge
28 May, 2024

Persistent scourge

THE challenge of polio in Pakistan has reached a new nadir, drawing grave concerns from the Technical Advisory Group...