Ishaq Dar estimates that Pakistan will be interest-free in five years

Finance Minister Ishaq Dar stated on Wednesday in Karachi that the country can become interest-free in five years, as required by the Federal Shariat Court (FSC) earlier this year in a ruling.

“The financial system has become a need of life, and it can provide transparent transactions,” Dar remarked at a conference in Karachi.

Under the auspices of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Centre for Islamic Economics in Karachi, religious leaders from all schools of thought, businessmen, bankers, and politicians discussed the “benefits” of an interest-free economy at length.

The April 2022 FSC ruling authorized the government five years to develop an Islamic and interest-free banking system, as the economic structure of an Islamic nation such as Pakistan should be interest-free.

In his ruling, Justice Dr. Syed Muhammad Anwar ruled that eradicating riba was essential to an Islamic society and that any transaction containing riba was unlawful.

“Abolition and prevention of riba conform with Islam. Interest accrued in any circumstance, including on debt, goes under riba. Riba is strictly prohibited in Islam, as mentioned in the judgment.

“If sincere decisions are made only for Allah’s pleasure, interest might be removed from the land within five years.”

Since then, religious parties and clerics have demanded that the government obey the ruling and compelled it to abandon its appeals.

Today, while speaking at a conference, the finance minister stated that Islamic banking has reached 20 to 21% of the market in the country and has assets of Rs7 trillion.

Dar concurred with the speakers that an Islamic banking system was conceivable in the nation.

According to him, the SBP and other banks have filed appeals against the rescinded FSC ruling.

After the seminar, a resolution was also delivered, encouraging the government to take meaningful actions to implement the FSC’s ruling and private banks to withdraw their appeals against it.

“We applaud the FSC’s decision against usury and are concerned that private banks have not withdrawn their appeals,” concluded the resolution.

It demanded that the administration take urgent action to execute the court’s ruling in a way that demonstrates tangible progress.

According to the resolution, the government should take steps to terminate the interest-based system within the specified time frame.

The group also demanded that the Transgender Act be changed following Sharia and that the film Joyland be banned.

Concerns were also raised regarding the reduced size of the FSC from seven to two judges.

The Governor of SBP pledges cooperative efforts.
Governor Jameel Ahmad of the State Bank of Pakistan (SBP) announced that the market share of Islamic banking has climbed to 21%, pledging concerted efforts to abolish interest entirely.

“We have withdrawn our appeal against the decision of the Federal Sharia Court, and the SBP is striving to implement the FSC’s ruling,” the SBP governor stated.

In this regard, the central bank has created a high-level working group.

He stated that Pakistanis desired to eliminate the non-Islamic financial system.

The founder of the Arif Habib Group, business billionaire Arif Habib, stated that Islamic banking was fast developing in the country.

“Now Pakistanis want to get rid of the interest-based system,” he remarked, urging the Ulema to advise the populace that had adopted the current system.

All schools are in agreement on Islamic banking.
Mufti Taqi Usmani, a renowned Islamic scholar, stated, “We must all raise our voices in unison to stop the plague of usury.”

In his address to the seminar, the prominent Islamic expert asserted that the stances of different Muslim schools of thought on usury are the same.

“Interest-free banking should be instituted, and usury should be eliminated. There is consensus on this issue.”

Mufti Usmani viewed the participation of scholars from different schools of thought as a positive aspect of the seminar. “The implementation of Sharia is the most vital problem, yet violent conflict is not permitted to achieve it.”

According to him, the goal of this seminar was to demand that the government and affiliated institutions take concrete measures to eliminate usury.

Previously, according to Acting FPCCI President Sulaiman Chawla, the business sector saw interest as haram, but Pakistan now pays 40% interest.

Chawla remarked, “Islamic financial facilities should be extensively adopted in banks.”