By Staff Reporter
ISLAMABAD: The central bank and at least four commercial banks on Saturday challenged a ruling of the Federal Shariah Court (FSC) for the abolishment of interest in the Supreme Court of Pakistan, seeking apex court’s guidance on Riba free economy in the country.
The FSC on April 28 directed the government to adopt Shariah-compliant financial system in borrowing from domestic or foreign sources.
The petition was filed by Salman Akram raja on behalf of the State Bank of Pakistan. Ministry of Finance, Ministry of Law, Chairman Banking Council and others have been made respondents on the plea.
“After detailed review of the judgment and based upon the advice of our Chief Legal Adviser and external counsel, we have sought guidance from the honorable Shariat Appelate Bench of the Supreme Court in terms of its implementation and practicalities involved,” the SBP said in a statement.
The central bank hailed the FSC’s April judgement in Riba case, as has already been done by the finance minister. “In particular, we appreciate the substantive part of the decision,” it added.
“As the prime custodian and regulator of the financial and monetary framework of the Islamic Republic of Pakistan, SBP is deeply committed to ensuring compliance with the injunctions of Islam, in particular those pertaining to riba, while protecting the stability and security of the financial sector of the country that functions as part of the global financial system.”
In this context, SBP has always remained at the forefront in promoting Islamic banking in the country. The SBP is among the few regulators across the globe where comprehensive legal, regulatory and Shariah Governance frameworks have been successfully developed and implemented.
Currently, 22 Islamic Banking Institutions (5 full- fledged Islamic banks and 17 conventional banks having standalone Islamic banking branches) with a branch network of 3,983 branches along with 1,418 Islamic banking windows (Islamic banking counters at conventional branches) are operational across the country.
The industry now accounts for 19.4 percent of the country’s overall banking system in terms of assets while in terms of deposits the share is 20 percent (as of March 31, 2022).
In addition, SBP has also been taking measures to bring the legal and regulatory infrastructure in compliance with Shariah principles.
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