Govt aims to abolish interest-based system in five years, says Dar

Finance minister says a system based on Zakat and Ushr can replace the current banking system

While welcoming a decision of the Federal Shariat Court (FSC), Finance Minister Ishaq Dar has said that the government aims at abolishing riba in the next five years.

The FSC declared a number of laws of the country repugnant to the injunctions of Islam, as they have provided for charging or paying interest, which according to the findings of the FSC, fall within the definition of riba.

"Earning money through interest is easy but it is not legitimate," Dar said while addressing a seminar in Karachi on Wednesday organised by the Federation of Pakistan Chambers and Commerce and Industry (FPCCI) and Markaz Al Aqtisaad Al Islami.

The financial czar said that the government aimed at abolishing the prevailing interest-based system in the country.

Read more: FSC gives govt five years to eliminate Riba

"If we sincerely decide only to please the Almighty then in five years riba can be eliminated from the country and it can be replaced by a system based on Zakat and Ushr," he added.

Dar said that he had instructed the secretary finance to first seeks loans on Islamic Sukook Bonds and only take interest-based loans when there is no other option.

"I wish that Allah grants me powers so I could eliminate interest in a week or a month but a state has [to conduct] its business and interest-bases system has been in place for the past 75 years," he added.

Welcoming the FSC's decision, he said that the percentage of Islamic banking in the country had already reached 20 to 21 per cent, adding that the government aims to completely implement Islamic banking in the next five years.

Dar expressed concern that two state institutions — the State Bank of Pakistan and the National Bank of Pakistan — appealed against the Shariat court's decision. "Now, we have taken those appeals back."