Naya Pakistan? Shariat court calls banking system against Sharia, tells govt to make it interest-free by 2027
In a long-pending case, the interest-based banking system in Pakistan has been declared against the Sharia. The verdict was given by the Federal Shariat Court (FSC) on Thursday.
In the ruling, the court has told the federal government and provincial governments to amend laws and make the banking system of the country interest-free by December 2027, media reports said.
The FSC has also directed the government to provide loans under an interest-free system.
This verdict has come at a time when Pakistan is reeling under deep financial crisis and is looking to secure loans from different organisations and countries.
"Islamic banking system is risk-free and against exploitation. Almost two decades have elapsed but the governments have not taken any decisions against the interest system," Justice Dr Syed Muhammad Anwar said.
The banks received more than the loan amount and fell under the category of usury, the court observed.
All the provisions of Interest Act, 1839, which facilitate interest, was declared unlawful by the court.
In the case, the FSC has also reserved its verdict on April 12.
A number of constitutional petitions, which were filed against the interest-based banking system in the country, were heard by the full bench of the FSC, which comprised Chief Justice Muhammad Noor Meskanzai, Justice Dr Syed Muhammad Anwar and Justice Khadim Hussain M Shaikh.
After the completion of the arguments of the lawyers of the parties, the decision of the case was reserved.
"With this backdrop based on facts, we do not agree with the apprehensions shown by the Federal Government that introduction of interest-free banking in the economic system of Pakistan may have a negative impact on the overall economic system of Pakistan," the judges found.
"Elimination of Riba from our economic system is our religious as well as our constitutional duty; hence, it has to be eliminated from Pakistan," the ruling added.
Finance Minister Miftah Ismail has welcomed the decision of the court and said the government and the central bank would "carefully study this important decision and then seek guidance and clarification from the FSC about the process, steps and timeframe" for its implementation.