Implement Interest-Free Banking Soonest: Business Community

The State Bank of Pakistan (SBP) and four private banks were challenged in the Supreme Court of Pakistan based on the decision of the Federal Shariat Court (FSC) that declared the present interest-based banking system be against the Sharia and directed the government to switch to an interest-free economy. The banks approaching the court drew strong reactions from the public and business community who wanted the Riba free banking that was also being operated successfully in other Islamic and non-Muslim countries.

FPCCI President Irfan Iqbal Sheikh said the business community supports transforming Pakistan’s economy and banking system into a riba-free system. FSC has set 2027 as the deadline to implement the interest-free system. It requires that government make necessary regulatory changes to facilitate and practice an interest-free financial system.

FPCCI Chief also called upon transforming Pakistan’s economy and financial system into an equitable, asset-based, risk-sharing and interest-free economy to avoid those ills and risks of riba (usury, markup, interest etc.) that are called “hell-fire” and it is forbidden to give and take riba in Islam.

Irfan Iqbal Sheikh maintained that Islamic banking was enhancing its operations successfully and prudentially in Pakistan; the market share of deposits and assets in the entire banking industry was 19.4 percent and 18.6 percent, respectively, during the year 2021. Additionally, net financing by Islamic banking institutions rose by 38.1 percent in 2021, which is very strong growth in financing by any standard.

They wisely demanded that the Ministry of Finance, Ministry of Law, Banking Council and other stakeholders join and work towards making Pakistan a riba-free country. He added that the prohibition of riba (interest) was absolute in all its forms and manifestations, as per injunctions of Islam and following Muslim’s Holy Quran and Sunnah.

President KCCI Muhammad Idrees urged that all stakeholder groups should be consulted. If there are genuine concerns, these should be resolved on a fast-track basis to pave the way for the timely implementation of the Islamic Financial System in Pakistan.

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