The Religious Board for Modarabas on Thursday approved different Shariah Compliant model Islamic financing agreements for Modaraba sector, facilitating resources mobilization of new products for the Islamic financial market.

According to an announcement of Securities & Exchange Commission of Pakistan (SECP) the Religious Board for Modarabas approved the following Shariah Compliant model Islamic financing agreements for Modaraba sector         (i) Diminishing Musharika  (ii) Ijarah  (iii) Istisna, (iv) Modaraba (v) Musawamah  (vi)  Musharika  (vii)Murabaha  (viii) Salam (ix) Syndicate Murabaha (x) Islamic CFS (xi) Murabaha and (xii) Sukuk (Islamic bonds).

The SECP said that the model Islamic financing agreement will be issued under the Modaraba Ordinance, 1980. They have been designed to bring the Modaraba Sector at a level-playing field with the financial institutions and to provide new products of the Islamic financing market.

The agreements are flexible and can be modified or amended to the extent that they do not affect the substance of the agreements and are in no way, in conflict with the Shariah.

The Religious Board for Modarabas  also approved as Shariah complaint the issuance of “ Modaraba Sukuks” short term certificate of investment , to facilitate resources mobilization for the modarabas.

 
The agreements and the Modaraba Sukuks were approved as Shariah complaint in the 34th meeting of the Religious Board for Modarabas, chaired by Justice Mian Mehboob Ahmed and attended by Dr. Sher Mohammad Zaman, Member Religious Board; as well as Bilal Rasool, Registrar (Modarabas), and Shahid Mehmood, Deputy Registrar Modarabas) representing the SECP, and Muhammad Shoaib, Chairman of the Modaraba Association of Pakistan (MAP) along with other representative of MAP.

Justice Mian Mehboob Ahmed emphasized the role of the Modarabas in the development of the Islamic financing sector and encourage them to expand their business through innovation and diversification.

He also highlighted the need to expand the outreach to the rural and low-development areas to serve the hitherto neglected sectors, while fulfilling the socio-economic principles of Islam.


The MAP representatives expressed their gratitude for the guidance and support provided b y the SECP and the Religious Board, which would enable the sector to evolve and expand its business and size within the expanding Islamic financing sector of the country, the SECP added.