KARACHI: The State Bank of Pakistan is working to simplify sukuk structures and streamline the issuance process to deepen the Islamic finance market, SBP Governor Jameel Ahmad said on Tuesday.

Speaking at the 3rd National Islamic Economic Forum (NIEF) Conference 2025, the governor said the SBP, in collaboration with the federal government, is actively working to shift more of the country’s public debt into sukuk.

On May 16, the government raised Rs31.99 billion through the issuance of a new three-year Variable Rate Green Ijarah Sukuk (GIS-VRR) via the stock exchange. Against a pre-auction target of Rs30 billion, investors submitted record bids amounting to Rs161.7bn, allowing the government to comfortably surpass its target.

The sukuk was issued under the government’s Sustainable Investment Sukuk Framework, aligned with Vision 2028, and secured at a net rental rate of 10.64 per cent.

The governor urged stakeholders to address the structural and regulatory bottlenecks hindering the growth of the local sukuk market.

Commenting on the external account, the SBP governor said the external debt declined by $1bn to $1.5bn, bringing the total debt below $100bn.

The State Bank also issued guidelines for the Regulatory Sandbox (RSB) on Tuesday to promote and facilitate new and existing entities to test their financial solutions.

Published in Dawn, May 21st, 2025