The State Bank of Pakistan’s Domestic Markets and Monetary Management Department has released an auction tender detailing its plan to raise Rs275 billion through the sale of Government of Pakistan Ijara Sukuk on a Bai Muajjal basis. The tender invites participation from all Islamic Banks and Islamic Banking Branches, underscoring the government’s continued use of Sharia-aligned financing instruments to support its liquidity and funding framework.
The Bai Muajjal structure, a deferred payment mechanism widely utilized within Islamic financial markets, enables the government to acquire liquidity without engaging in interest-based transactions. Under this method, the Sukuk are purchased on a deferred payment schedule, with settlement occurring at a future, pre-agreed maturity date. This makes the approach compliant with core Islamic banking principles and attractive to institutions operating under Sharia governance.
The auction plan is divided across two issuance windows. The first auction is scheduled for November 26, 2025, targeting Rs175 billion through the GIS-VRR-22 issue. Sukuk delivery is set for December 3, 2025, with a Bai Muajjal tenor of three years and maturity falling on December 3, 2028. The second auction will take place on December 24, 2025, with a target of Rs100 billion through the GIS-VRR-27 issue. Delivery for this tranche is expected on December 29, 2025, with the same three-year Bai Muajjal maturity, ending on December 29, 2028. These timelines position the instruments as medium-term liquidity tools within the Islamic finance ecosystem.
The State Bank has outlined a clear operational framework for the auction cycle. Participating institutions must submit their tenders by 1200 hours on the respective auction dates. While the exact timing for the opening of tenders will be communicated separately via email, the SBP has confirmed that results will be announced on the same day as each auction. This ensures that market participants have both transparency and timely access to allocation information. The central bank also retains the authority to reject any or all bids without justification, a standard clause that allows flexibility in managing market dynamics and liquidity conditions.
Both Sukuk issues fall under the variable rental rate framework and represent an ongoing strategy by the government to diversify its Sharia-compliant borrowing instruments. The three-year tenor aligns with demand patterns observed across Islamic banking portfolios, where medium-term assets often serve risk management and balance sheet optimization functions. For Islamic banks, the availability of these Sukuk offers an opportunity to deploy liquidity in instruments backed by sovereign credit while adhering to mandated Sharia investment standards.
This issuance cycle also reinforces Pakistan’s commitment to strengthening its Islamic finance infrastructure. By continuing to deploy Bai Muajjal-based Sukuk, the SBP is providing market participants with structured, compliant investment pathways that support both financial sector depth and government fundraising needs. The dual-auction approach further ensures staggered liquidity absorption, allowing institutions to plan capital allocation across the final quarter of the calendar year.
As the Islamic banking segment continues to expand in Pakistan, instruments such as these are poised to play a significant role in shaping funding flows and enabling compliant investment strategies. The upcoming auctions will serve as a key indicator of investor appetite and market conditions heading into 2026.
Follow the PakBanker Whatsapp Channel for updated across Pakistan’s banking ecosystem.