ISLAMABAD:The Federal Shariat Court (FSC) on Thursday announced its verdict on Riba (interest) based banking system and termed it against the Shariah.
The three-member FSC comprising Chief Justice Muhammad Noor Maskanzai, Justice Dr Syed Muhammad Anwar and Justice Khadim Hussain M. Sheikh announced its reserved verdict on Riba. The FSC had reserved its verdict in the case on April 12.
The court accepted the petition and declared that the prohibition of Riba was complete and absolute in its all forms and manifestation according to the Injunctions of Islam in accordance with the Holy Qur’an and Sunnah.
“Therefore, for all detailed reasons deliberated on this judgement the charging of any amount in any manner over the principle amount of a loan or debt is Riba which is completely prohibited according to the Holy Qur’an and Sunnah of Holy Prophet (SAW).”
The court ruled that the federal and provincial governments must amend relevant laws and issued directives that the country’s banking system should be free of interest by December 2027.
The court observed that banks were receiving more than the loan amount when fell under the category of usury. “The Islamic banking system is risk-free and against exploitation,” Justice Dr Syed Muhammad Anwar remarked.
Justice Anwar said almost two decades had lapsed but the governments had not taken any decisions against the interest system.
The court also declared all the provisions of the Interest Act 1839, which facilitate interest, as unlawful.
The court said the prohibition of Riba was the cornerstone of the Islamic economic system.
The FSC said the speedy proliferation and exponential growth of interest-free banking not only in Pakistan but also in the whole Islamic world and even worldwide was a reality that had established that the interest-free banking system was not only practicable but feasible too.
The verdict stated that the court did not agree with the apprehensions shown by the Federal Government that introduction of interest-free banking in the economic system of Pakistan could have a negative impact on the country’s overall economic system.
It stated that the elimination of Riba from the economic system was not only religious as well as constitutional duty; hence it had to be eliminated from Pakistan.