SBP moves apex court against Shariat court's interest ban

The State Bank of Pakistan (SBP) moved on Saturday the Supreme Court against the Federal Shariat Court’s (FSC) decision to shift to an interest-free economy.

Salman Akram Raja filed the petition on behalf of the SBP, while four other private banks also appealed against the FSC’s decision with the Ministry of Finance, Ministry of Law, Banking Council chairman and others listed as parties.

The central bank’s appeal stated that the FSC did not heed the orders of the Supreme Court remand order and declared the rules related to savings certificates as un-Islamic, and thus, ordered to amend the rules.

The banks requested that the appeal against the decision of the Shariat court be allowed, and the extent of the points raised in the decision be amended.

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Earlier, the FSC declared that the prohibition of Riba (interest) was absolute in all its forms and manifestations according to the injunctions of Islam and in accordance with the Holy Quran and Sunnah. Therefore, it should be eliminated from the country in five years.

The decision came after the matter pended for 20 years.

“We are of the view that five years period is reasonably enough time for the implementation of our decision completely i.e convert economy of Pakistan into, equitable, asset-based, risk sharing and interest-fee economy,” read a 298-page judgment authored by Justice Dr Syed Muhammad Anwer and endorsed by two other judges.

“Therefore, we would specify the 31st day of December 2027 on which the decision shall take effect by way of the complete elimination of Riba from Pakistan,” it added.