Govt announces end to riba in five years, SBP, NBP to withdraw pleas: Dar

[Super Falcon]

The fact that in the Islamic Republic of Pakistan, the Shariah court’s ruling can be challenged in Supreme Court is shameful enough.
Is Pakistani constitution higher than the Law Of Allah?

Totally agree Pak constitution in itself protects the sharia law how do any court accept cases against sharia is mind boggling

 

[CrazyZ]

Personally, I think Pakistani financial system is very outdated and desperately needs modernization. Monetary system for tribal Arabs at the time of the prophet is very different then today. Tribal Arabs used precious metal coins as currency (there were no central banks).....today fiat currency can be created into existence by a few key strokes of a central bankers computer. Notions of usury and inequality is completely different in the two monetary systems. How can one have an excess if the overall money supply is increasing under the fiat monetary system? Some Arab scholars argue ban on Riba only applies in a gold based monetary system and not fiat currencies that can be created from nothing. Just something for the scholars to think about.

 

[nahtanbob]

Interest-free economy

Conversion to a interest-free financial system demands thorough and extensive research.

www.dawn.com

FINANCE MINISTER Ishaq Dar’s announcement that the ruling coalition would withdraw the legal challenge to the April judgement of the Federal Shariat Court that gave the government until the end of 2027 to eliminate interest-based banking must have come as a surprise.

Mr Dar said the government wants to eliminate riba as soon as possible. He also said that both the State Bank and the state-controlled National Bank would immediately take back the appeals against the FSC decision. But it still isn’t clear how the government plans to achieve this goal and meet the court’s deadline. Nor is it clear whether or not the private banks that have also challenged the decision, which declares interest-based banking “in all its forms and manifestations” against Islamic teachings, will withdraw their appeals.

The matter has lingered since 1991 when the FSC first declared that ‘simple interest’ charged on all kinds of financial transactions — domestic and international — to be riba, and against the injunctions of Islam, due to its far-reaching implications for the banking and financial system, and the country’s dealings with the outside world.

Islam prohibits riba out of the concern that it results in what has been described as “profiteering and money-making in a multiplication mode of economic exchange”, which doesn’t involve labour and effort by the owner of economic resources. But, as pointed out in this space previously, many scholars argue that riba shouldn’t be equated with simple interest charged on modern financial transactions, because it is based on rational, mutually agreed contracts of economic exchange, and sharing of risks, liabilities and profits.

Even if the banking system is ‘rid’ of riba, how would we know that the new system conforms to Islamic edicts?


Islamic banking has grown reasonably fast in the last two decades in Pakistan and many have shifted to it, trusting the fatwa of the so-called Sharia boards of the banks. Yet many doubt that the Islamic financial instruments being offered are actually riba-free or conform to the framework laid down by the leading schools of thought in Islam.

Conversion to a riba-free financial system, or what some describe as Islamic finance, demands thorough and extensive research to understand and define what really constitutes riba. That is important because the shift to an interest-free economy in a complex, globally integrated financial system can be extremely challenging if not impossible.

Sadly, in more than three decades, neither the FSC nor successive governments nor the banks have given any thought to comprehensively studying the issue or its implications. It is advisable that the government, the FSC and other stakeholders move cautiously on this path, instead of rushing into it for political reasons.

It doesn’t matter whether or not the government withdraws its challenge to the FSC decision. What matters is that whatever decision is taken should be done on the basis of thorough research.

Published in Dawn, November 11th, 2022

 

[SoulSpokesman]

Good development, although long delayed.

Regards

 

[epebble]

fiat currencies that can be created from nothing

Though it seems like that, money supply has to be carefully balanced against demand and economic activity to prevent inflation (or deflation). It is a very difficult job. That is why most currencies around the world, except a few, depreciate rather fast. Removing interest, only makes things worse as there is no feedback signal for the central bank to know market condition. Removing interest will so distort capital allocation that the economy will seize very quickly. It will be worse than devaluation. More like demonetization.

 

[Sayfullah]

Supreme court is the apex court and given the state of our ulema their rulings must be challenged rather can be challenged

And btw I don't think sharia court has lodged any objection to transgender bill...

Pakistan is only Islamic by name and that’s the fact. Nothing else is even remotely Islamic about it. Pakistan is as Islamic as any secular republic.
I don’t want to continue this conversation further.

 

[insight-out]

This is just a gimmick to appease the religious groups and hopefully garner some votes. Interest CANNOT be abolished in 5 years, not in the current state of our economy. We will have to be an economic powerhouse at a global level before we can even attempt this.

 

[nahtanbob]

This is just a gimmick to appease the religious groups and hopefully garner some votes. Interest CANNOT be abolished in 5 years, not in the current state of our economy. We will have to be an economic powerhouse at a global level before we can even attempt this.

removing interest makes money worthless

of course you always go through the charade of calling interest by some other arabic name

 

[AZ1]

So it will take 5 years? Annoucement is good how to implement? they may not here in 5 years

 

[Longhorn]

ISLAMABAD: Finance Minister Ishaq Dar has stated that the federal government has decided to withdraw the State Bank of Pakistan (SBP)’s and the National Bank of Pakistan (NBP)’s appeals from the Supreme Court against Sharia court with respect to make the economy interest-free in the next five years.

The finance minister announced this through state-owned new channel on Wednesday.

The minister said that he would like to share a decision taken by the government on behalf of the prime minister and allies with regard to withdrawal of appeals against Sharia Court verdict from the SC.

Ishaq Dar said that with the permission of the prime minister and after consultation with the SBP, he was announcing that the SBP and the NBP would withdraw its two appeals from the SC against Sharia Court verdict.

The minister added that Federal Sharia Court in recent past had given a decision for transforming Pakistan’s economy to make it interest (Riba)-free in the next five years.

He said that the matter was deliberated in detail during the last few weeks and consultation were also held with Governor SBP on the matter besides discussion on future road maps. Dar said that during 2013-18 considerable progress was made for promoting Islamic banking system and a special committee with prominent religious scholars was also established. However, he said that during the last few years the progress was not that speedy.

The minister said that the government would make effort to implement the Islamic System in Pakistan, however, would not he possible to shift immediately due to various challenges as entire banking system is implementing a system for the last 75 years.

Govt announces end to riba in five years | The Express Tribune

Dar says FSC’s order on interest-free banking to be implemented

tribune.com.pk

BR-ePaper | Nov 10, 2022 | Page Front Page 1

epaper.brecorder.com

https://twitter.com/x/status/1590353386603700224

Hypocrite.
Smokescreen.
It's never going to happen.

 

[That Guy]

Not gonna happen. They can probably win a few votes from the jahil, but most people know that this won't happen.

 

[Mrc]

Pakistan is only Islamic by name and that’s the fact. Nothing else is even remotely Islamic about it. Pakistan is as Islamic as any secular republic.
I don’t want to continue this conversation further.

Today's world Pakistan is more Islamic than any other country in the world

I don't want to talk to you either

 

[Sayfullah]

Today's world Pakistan is more Islamic than any other country in the world

I don't want to talk to you either

I haven’t laughed this hard in ages. Thanks for the joke!

 

[my2cents]

Allow the lenders to retrieve only the capital amount/ or in case if the interests payments have already reached at par with the capital amount then quit the shit show.

If I borrowed $100 today and returned you back $100 after 5 years then why would you loan me in the first place. What benefit is it to you?

With inflation in high double digits your money is worth less after 5 years than when you lend it.

 

[Mrc]

I haven’t laughed this hard in ages. Thanks for the joke!

Name the country so I can also relax and laugh