|Thread Review (Newest First)|
|Posted by Ali® - 01-06-2012 11:01 PM|
KARACHI - Asks money exchangers to augment compliance culture
The central bank on Wednesday advised the exchange companies to strengthen their compliance culture and ensure adherence to the prescribed rules and regulations of the State Bank of Pakistan (SBP).
This was state by Kazi Abdul Muktadir, executive director SBP, while opening an awareness program on Corporate Governance for the board of directors and chief executives of the exchange firms here at the SBP.
The executive director said the program would go a long way towards capacity building of the exchange firms and enhance their effectiveness as well as credibility.
Also, Kazi briefed the participants about the background under which the exchange firms were established and opportunities available for them to graduate towards larger sized companies.
Director Development Finance Institutions and Exchange Companies Inspection Department, SBP Shaukat Zaman and other senior officers of the SBP and Financial Monitoring Unit (FMU) also spoke on the occasion.
The program was held under the auspices of the SBP’s DFIs&Exchange Companies Inspection Department to create awareness on corporate governance, internal controls, Management Information System (MIS), Know Your Customer (KYC)/Anti Money Laundering (AML) for better understanding to further improve their compliance culture.
More than 80 directors and CEOs of the exchange firms of both A and B categories representing 27 companies, having their head offices in Sindh and Balochistan, participated in the program.
Chairman Exchange Companies Association of Pakistan (ECAP) Malik Muhammad Bostan and President ECAP Haji Haroon among others attended the awareness program. Bostan thanked the SBP for organizing this important awareness program and offered to extend his all out support for such initiatives of the central bank.
Moves to standardise treatment of credit Murabahahe central bank on Wednesday notified certain regulatory changes in the relevant rules with an aim to standardize the recording and reporting of credit Murabaha transactions carried out by the Islamic banks. The State Bank, through issuing a circular to all Islamic banks and
The conventional banks having Shariah-complaint branches, noted that the practice of recording and reporting of credit Murabaha transactions was not standardized across the industry.
The regulator said the cases wherein IBI purchases the goods on supplier’s credit and sells the same on credit under Murabaha, the transaction shall be booked as on-balance sheet item by appropriately recording ‘Payable to supplier’ and ‘Receivable from customers against Murabaha’ for the said credit purchase and credit sale respectively.
It said the CRR/SLR and capital adequacy requirements on the said liability and financing, respectively, shall be applicable as per prevailing SBP instructions, issued from time to time.
Thirdly, the banks’ profit on the said transaction would be recognized as per the provisions of IFAS-1, it added. Theses instructions, the SBP said, were in line with the spirit of the IFAS-1.
“Unlike normal Murabaha transactions wherein IBIs purchase the goods on cash and sell the same on credit, under credit Murabaha transactions, the IBIs purchase as well as sell the goods on credit as the suppliers allow credit for a certain period on the sale of goods,” it said.
While normal Murabaha transactions are recorded and reported as per IFAS-1, the practice of recording and reporting of credit Murabaha transactions is not standardized across the industry. “Therefore, in order to bring standardization in recording and reporting of credit Murabaha transactions,” the above instructions were issued, the central bank said. These instructions are applicable with immediate effect.
Murabaha is an Islamic banking product that denotes an approved mode of finance for the Islamic Banking Institutions.