FSC orders establishing Riba-free banking system in country

The Federal Shariat Court has ordered establishing Riba-free banking system in the country as per the Islamic teachings, reported 24NewsHD TV channel.

The Federal Shariat Court had reserved its verdict in the case seeking Riba (interest) free economy in the country on April 12 last.

The full bench of FSC comprising Chief Justice Muhammad Noor Meskanzai, Justice Dr Syed Muhammad Anwar and Justice Khadim Hussain M Shaikh heard a number of constitutional petitions filed against Riba-based banking system in the country and reserved the decision of the case after completion of arguments of the lawyers of all the parties.

Declaring all those laws in which the word Riba (interest) was mentioned against the Islamic Shariah law, the Federal Shariat Court (FSC) also ordered the government to immediately repeal all such laws. 

Pronouncing a reserved verdict on the petitions filed against the interest-based banking system in the country, the court refused to grant more time to the government and ordered it to amend these laws by December 31, 2027. “It is unfortunate that the government has been buying time for the last two decades,” the court said.   

In its verdict, the FSC said that it had listened to the arguments from all the parties to the case, including the attorney general of Pakistan. “Contrary to the general impression, interest-free banking is being practised in some areas of the country. Hence there is no reason to doubt why such a system cannot be introduced in the remaining parts of the country,” reads the verdict.    

The court clarified that the Islamic Banking and the interest-free banking were two different things, but the latter was in complete harmony with the former.  

Declaring the Interest Act of 1839, West Pakistan Money Laundering Act and other interest-related laws against the Islamic Shariah, the FSC ordered the government not to borrow any loan on interest from now on from inside or outside of the country. 

The court, in its decision, said that it was incumbent upon the government to eliminate loan borrowing on ‘interest’. “We will have to get rid of the system at all costs. The Islamic banking is risk-free and is an antithesis of the system of exploitation,” read the verdict.

The FSC bench declared that establishing Riba-free banking system in the country as well as throughout the entire world is possible.

The FSC judges ruled that interest taken by banks on any type of loan will fall within the category of Riba that is prohibited in Islam.

The long-pending Riba case was remanded by the Shariat Appellate Bench Supreme Court of Pakistan in 2002.

Justice Syed Muhammad Anwar announced the verdict, stating introducing interest-free banking system in Pakistan is possible as it is being practised by some institutions in the country.

JI Chief Sirajul Haq terms verdict ‘victory for party’ 

Later, talking to the media outside the FSC, Jamaat-e-Islami (JI) Ameer Sirajul Haq thanked The Almighty Allah and called the decision a victory for the party.  “I want to congratulate the entire nation on today’s court ruling. The decision is historic,” he said, adding, “It is pertinent to mention here that Pakistan was created on the night of Lailatul Qadr, and this court ruling, too, had also been given on the same day. 

Siraj asked the government to comply with the court order without any ‘ifs and buts’. “The government should implement it in letter and spirit. If it does not do so, we will not forgive it and take it to the task,” he warned. 

JI chief said it should be borne in mind that the Islamic Banking had become quite popular in the entire world. “We will mark the coming Friday as ‘Thanksgiving Day (Yaume Tashakur),” he announced. 

He called upon the government to withdraw from all the agreements it had signed with the International Monetary Fund (IMF) and other monetary organisations.

Reporter: Amanat Gishkori