Case was remanded back to the Shariat Court by the Supreme Court in 2002 to reconsider its judgment delivered in 1992. PHOTO: FILE
The Federal Shariat Court (FSC) has decided to take up the long-pending case on Riba (usury) on March 24. The case was remanded back to the Shariat Court by the Supreme Court in 2002 to reconsider its judgment delivered in 1992, which declared interest or Riba repugnant to the injunctions of Islam.
Earlier, in 1999, hearing an appeal against the decision, the Supreme Court’s Shariat Appellate Bench upheld the FSC decision and gave the then government two years to amend all the banking laws of the country and other statutes to prohibit Riba.
Later, however, the government and some banks had instituted a review petition before the Supreme Court bench, headed by Chief Justice Sheikh Riaz, against the anti-Riba ruling. The bench remanded the case in 2002 back to the FSC to reconsider the matter.
The apex court also directed the FSC to take input from contemporary jurists of the Muslim world. In its order, the bench had held: “We are of the considered view that the issues involved in these cases require to be determined after thorough and elaborate research and comparative study of the financial systems, which are prevalent in the contemporary Muslim countries.”
The FSC had already commenced the preliminary proceedings of the hearing last year in 2013. It is learnt that the Shariat court has heard the point of view of two jurist consultants, Tahir Mansuri and Dr Ayub of Riphah International University, Islamabad.
In addition, the FSC had prepared a questionnaire and sent it to Dr Wahba Zuhaili (Syria), Dr Sami Ibrahim Suwailem (Saudi Arabia), Dr Ali Mohiuddin Al Qaradaghi (Qatar) and Dr Ajeel Jassem al Nashmi (Kuwait) seeking their views regarding the issue.
The FSC has already received the view of Dr Zuhaili and Dr Sami Ibrahim, but the court has not received the opinion of others as yet.
When the Shariat Court takes up the 22-year-old case on March 24, Attorney General Salman Aslam Butt will present the government’s stance on the matter.
Published in The Express Tribune, March 2nd, 2014.
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@Xnain: Capitalism is all about exploitation. In economics they teach you that for a business to make a profit it has to pay its employees less than the value of what they produce.
In the case of the banking industry they've formed a cartel and are all sitting pretty. The only way to stop them is with the mass adoption of disruptive technology. Fortunately for them most Pakistanis are allergic to technology.
Looks like they've been fatwa shopping for 22 years. It's highly unlikely anything will come of this. No way is the government going to outlaw interest when the whole country depends on it.
@H.A. Khan: They used to go through pretty bad periods of inflation in ancient times. Back then nobody even understood how inflation came about. So governments kept on creating new money. One of the reasons behind the fall of the Roman empire was currency debasement and the resulting inflation.
@H.A. Khan: If returns are paid so as not to erode buying power rate of return in Pakistan is still negative on bank deposits (5% vs 12 inflation), banks earn 18-20% on lending while paying 5% on deposits, isn't it the concept of usury which was also aimed at exploitation rather than helping....
@H.A. Khan: Good question, also my point is that Banking and Finacial system we deal with is only two hundred years old when representative money completely replaced barter system and metal coins. Present Institutionals lending system is not only completely opposite, also more human than the system on which most of the Islamic scholars give their opinion.
Riba is not usury it is interest. Sood is usury and a different animal altogether. Interest is rent you pay an institution for borrowing money, just like rent you pay to borrow anything else.
What was the rate of inflation 1400 years back and what is the rate of inflation now?. If returns are paid so as not to erode buying power,can it still be called usury?..