ISLAMABAD, Feb 9: A-Zamin Leasing Modaraba and Saudi Bashair Holding Company of Jeddah have signed an agreement for setting up an Islamic commercial bank in Pakistan and a leasing company in Saudi Arabia.

The agreement was signed by Dr Abdullah Baabod on behalf of Saudi Bashair Group and Basheer A. Chowdry for Al-Zamin Group at a ceremony held here on Wednesday. It was attended among others by Saudi Commerce and Industry Minister Dr Hashim Bin Abdullah Yamani and Pakistani Commerce Minister Humayun Akhtar Khan.

According to the agreement, Saudi Bashair Holding Company would provide equity, which along with capital to be provided by respectable Pakistani investors, would form the basis for seeking an approval from the State Bank and the Securities and Exchange Commission of Pakistan to convert Al-Zamin Leasing Modaraba into an Islamic commercial bank.

Simultaneously, the Bashair group and Al-Zamin have agreed to set up a leasing company in Saudi Arabia, which would handle ijara, musharika and morabaha transaction. Necessary applications are being made to the Saudi Foreign Capital Investment Authority and the Saudi Arabia Monitoring Authority for this purpose.

With the sponsorship of Bashair group and professional management to be provided by Al-Zamin, the proposed leasing company was expected to handle significant business initially in Jeddah and later in other major cities of Saudi Arabia.

The proposed Islamic commercial bank will be one of the institutions which are being licensed by the SBP in the implementation of its declared policy of promoting Islamic financial system in the country. Al-Zamin has a successful track record of operating for the last 12 years under the Islamic infrastructure as a modaraba.