Businesses weigh options after court decision on Riba-free banking
As religious segments welcomed the decision of the Federal Shariat Court (FSC) to implement an interest (Riba)-free banking system by December 2027, business and trade stakeholders on Thursday appeared cautious in their optimism.
Taking to Twitter, Finance Minister Miftah Ismail tweeted: "We welcome the Federal Shariat Court (FSC) decision in the Riba case. The government and SBP will carefully study this important decision and then seek guidance and clarification from the FSC about the process, steps, and time frame to implement this decision."
Whereas the decision of the FSC has brought concerns to the business community, which made veiled statements welcoming the move, but added that they could not see any alternative to the existing system of economic, banking, and monetary transactions.
Responding to the query, Islamabad Chamber of Commerce & Industry (ICCI) President Shakeel Munir said that being a Muslim, the ruling on Riba-free banking was a welcome decision for everybody.
"But the fact is that Pakistan is under an IMF programme and this is not an easy decision to implement," he said.
He added that the ICCI was planning to hold an economic revival conference after Eid and the top agenda would be the way forward in this regard and seek alternate business solutions.
Meanwhile, Dr Qibla Ayaz, Chairman of the Council of Islamic Ideology (CII), welcomed the decision and stated that the FSC, after lengthy hearings, declared the existing interest laws in conflict with Sharia.
"The CII will play an active role in the support required by the legislatures. We have always called for the abolition of the interest-based economic system in the country and the adoption of Islamic alternatives."
The CII has already submitted a report to Parliament containing comprehensive recommendations related to the "Riba-free" economy.
The CII has said that the FSC has paved the way for the implementation of an Islamic economic system in the country, which would enable all sections of society to equally benefit from the growth of the economy as per Sharia.
Similarly, the Wafaqul Madaris Al Arabia, the largest madrassah board in the country, administering the religious seminaries belonging to the Deobandi school of thought, has called the FSC decision historic and has been pending for 19 years.
Wafaq added that it was the third time that such a decision had been taken by the judiciary against Riba.
A statement in support of the FSC decision has been made by Mufti Taqi Usmani, Qari Hanif Jalandhari, and others. Jamaat-e-Islami (JI) Amir Sirajul Haq has welcomed the FSC's decision on Riba, saying the government now must implement the judgment in letter and spirit.
The JI has been pursuing the case against the interest-based economy in Pakistan at various forums, including parliament.
The International Monetary Fund (IMF) has urged Pakistan to bring its current account deficit under control, an official said, as Prime Minister Shebaz Sharif's government seeks an increase in the size and duration of the current IMF programme.
Pakistan's current account deficit ballooned to $13.2 billion in the nine months of the current fiscal year from a gap of $275 million a year earlier on the back of soaring oil import costs, official data showed.
Rating agency Moody's expects the deficit to widen to five to six per cent of gross domestic product in the current fiscal year ending June 30, up from its earlier 4pc projection, putting greater pressure on Pakistan's foreign reserves.
Jihad Azour, director of IMF's Middle East and Central Asia Department, told Reuters that the fund's team will assess the policy priorities of the new government and the economic impact in the context of the war in Ukraine.