IDB delays decision on $1.5 billion in aid to Pakistan

The final decision on a $1.5 billion rescue package managed by the Saudi-based Islamic Development Bank (IDB) to sanctions-hit Pakistan has been delayed until early September, IDB said.

The details of the package, provided by a large consortium of Arab banking and financial institutions overseen by IDB, will be negotiated in a meeting scheduled for September, an IDB statement said.

Banking sources said the meeting would take place in September.

Meanwhile, the Pakistani negotiating team returned to Islamabad after talks with the IDB on Saturday failed to reach a final conclusion.

Other banks involved in the package include the Arab Banking Corporation, Saudi Arabia's National Commercial Bank, and Al-Baraka Group, Dubai's Mashreq Bank, Kuwait Finance and Bahrain - based Gulf International Bank.

IDB has 52 member states, including Pakistan, with its largest contributions coming from Saudi Arabia and Kuwait.

Established by the Organization of the Islamic Conference in 1973, it funds economic development in member states.

IDB disclosed that the final bail-out package will be compatible with Shariah (Islamic) law, which prohibits "interest-based loans but not "profit" returns from the financing of projects.