Islamabad: Federal Shariat Court on Thursday declared existing interest-based banking system in the country against the shariat.
The Federal Shariat Court announced the verdict on the petitions against interest system after 19 years.
The federal shariat court in its verdict said that interests free banking can possible in the whole world while the court does not agreed to the federal government over the negatives effects of the interest-free banking system
The eradication of interest-based banking from the economic system is a duty under shariat and legal responsibility.
The court in its decision said that all the types of the profits come under interests. The court declares all the legislation for the facilitations of interests, articles and interests act 1839 as against the shariat and directed the government to take internal and external loans under the system free of interests-based system.
The verdict further added that the Islamic Banking system is free of risk and against exploitation adding that it is must to eradicate interests system from the country at all cost. Ending the interests is among the basic principles of Islam. More amount then the loan come into category of “riba”
The federal shariat court in its verdict said that it is instructed to the government to end the use of word interest adding that “riba” is totally wrong in an every way.
The court said that the system free of “riba” will be more beneficial adding that China also wants a system free of interest for all the projects of the CPEC (China Pakistan Economic Corridor).
All the laws declared against shariat will be end from June 1, 2022.
The Federal shariat court has given a five-year term to the government for the implementation while urging the government that all the transactions with International Monetary Fund, (IMF), World Bank including all the international institutions be made free of interest.
It is pertinent to mention here that Supreme Court of Pakistan in 2002 had sent the case to the Federal Shariat Court for verdict again.