KARACHI: The State Bank of Pakistan (SBP) has introduced a Shariah-compliant standing ceiling facility and open market operations (injections) for Islamic banking Institutions (IBIs) to improve the liquidity management framework for the Islamic banking industry and enhance the effectiveness of monetary policy implementation.

According to a press release issued on Wednesday, the move is aimed at bringing IBIs on a par with their conventional counterparts in terms of liquidity management avenues.

The Shariah-compliant standing ceiling facility is a Mudarabah-based financing facility (MFF) whereby the SBP will provide financing to IBIs on an overnight basis against Shariah-compliant collateral.

Published in Dawn, December 30th, 2021