FSC declares Riba system against Shariah
The Federal Shariah Court (FSC) on Thursday, while ruling on petitions related to the interest system said that, the economic system of an Islamic state like Pakistan should be interest free and declared the Interest Act 1839 un-Islamic.
Justice Dr Syed Anwar pronounce the verdict on the petitions seeking elimination of interest system.
The Federal Shariah Court said that the decision was announced after hearing all the scholars and the Attorney General.
The court ruled that the elimination of interest was the basis of the Islamic system, and that any transaction involving interest was wrong. The elimination of Riba and its prevention is in accordance with Islam.
Interest payment on all interest and external debts by the government is Riba, the top Islamic court ruled and directed the government that transactions with international institutions including IMF and World Bank should be made interest free.
The decision said that Islamic banking and interest free banking system are two different things, there were already interest free banking system in some places in Pakistan, interest should be eliminated in Pakistan.
The decision of the Federal Shariah Court said that the economic system of an Islamic state like Pakistan should be interest free.
The ruling of the Sharia court said that China is also moving towards interest-free banking in accordance with the Islamic Sharia system. It also directed the government to following Shariah laws while finalizing agreements with Chinese government for CPEC projects.
All laws that use the word “interest” are considered to be contrary to Islamic law. From June 1, all legal clauses that contain the word “interest” will be considered null and void, the shariah court said.
The court further set a deadline of 31 December 2027 to fully implement court’s order on elimination of interest from the country and said that the government could also implement the decision prior to the deadline.