ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail held a meeting with renowned Islamic scholars Mufti Muhammad Taqi Usmani, Dr. Hussian Akbar, Dr. Raghib Naeemi and Shaikh Azhar Iqbal on implementation of Shariah in banking system and elimination of Riba from Pakistan at the Finance Division.
Minister of State for Finance and Revenue Dr. Ayesha Ghous Pasha, Governor SBP, Chairman SECP, Secretary Finance, Secretary EAD, Secretary Law & Justice, and senior officers attended the meeting.
The meeting reviewed the current state of Islamic Finance operations in the country, the Supreme Court’s order and Federal Shariat Court’s decision in the Shariat petition as well as discussing and seeking guidance in certain financial areas requiring more clarity for the implementation of Shariah in the financial system of the country.
Renowned Islamic Scholar Mufti Muhammad Taqi Usmani and others shed light on the different aspects of the Islamic financial system and gave their suggestions for designing a framework for handling of public debt through Shariah complaint financing/debt structure.
The Islamic scholars also made suggestions for the implementation of a banking system on Islamic lines for the monetary policy and Islamic interbank system. It was also suggested that a separate section should be created in the Finance Ministry on Islamic Financing.
The chair while emphasising the the prime minister’s directives on the implementation of a Riba free system in Pakistan endorsed the suggestions of the religious scholars and asked the relevant authorities to chalk out the programme on discussed lines.
The Chair further directed for arrangement of meeting of religious scholars with banking sector for more guidance and clarity on the issues regarding Shariah compliant mechanism.
It may be called that the Federal Shariat Court in April had given the government five years to implement an Islamic and interest-free banking system in the country, stating that the economic system of an Islamic country like Pakistan should be free of interest.
“The abolition of riba and its prevention is in accordance with Islam. The interest taken in any case, including debt, falls into riba. Riba is completely forbidden in Islam,” the order had read, adding that the government should ensure that internal, external loans and transactions are made interest-free along with transactions with international institutions, including the IMF and World Bank.
Reportedly, the attorney general had informed them that it would take time to get rid of the interest-based system in the country. However, the Shariat Court stated that five years is enough time to ensure the implementation of an Islamic and interest-free banking system in the country.
“The government is expected to present an annual report on the interest-free system in Parliament,” the verdict read.
It is pertinent to mention here that the State Bank of Pakistan (SBP) has appealed over the Shariat Court’s decision in the Supreme Court.
I always knew Riba is prohibited. The issues is fiat currencies did not exist at that time. Now currency does not have any intrinsic value, the value can be and is manipulated by the central bank. In this case how does one even define Riba? can one adjust for inflation? These are the questions I have and unfortunately I have not heard any intelligent discussion on any platform this very topic.
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