Economy needs to be stabilised with Islamic banking system; Curse of usury should be eradicated, says Mufti Taqi
Finance Minister Ishaq Dar on Wednesday said the country can become interest-free in five years as stipulated by the Federal Shariat Court in its judgement this year.
“The banking system has become a necessity of life and transparent transactions can be ensured through it,” Dar said. He said the government is determined to promote Islamic finance and eliminate the interest-based system in the country. He was addressing a conference titled “Hurmat-e-Sood” in Karachi on Wednesday.
The Minister said that the country needed at least five years to move towards an ‘interest-free’ banking system under Islamic law. Dar said that the country’s economy needs to be stabilised with the Islamic banking system.
The minister informed the participants that a special wing would be set up at the State Bank of Pakistan for the promotion of an interest-free system. “I would notify the wing in a week’s time,” he added.
The finance minister lauded the Federal Shariah Court decision, saying that “A base has already been established, as Islamic banking, in terms of overall assets and deposits, enjoys a market share of 20% and 21%, respectively,” said Dar, adding that further progress needs to be made in this regard.
Ishaq Dar said that significant progress is required in non-banking sectors including mutual funds, insurance and capital markets on Islamic terms.
Dar said that attempts are made worldwide to improve financial inclusion. “In this regard, we made considerable progress during our previous stint and approximately 30% of the population became part of the banking sector,” he said adding that steps are being taken that every individual is included in the financial system.
The finance minister observed that the country is facing twin deficits i.e. current account and budget deficit. “There is a need to impose a fiscal discipline. We need to increase our incomes while rationalising our expenses in order to the budget deficit,” he added.
Quoting Mufti Taqi Usmani that the goveremnt should keep its money in Islamic banks, Dar said how the government would keep its money in Islamic banks when it doesn’t have money, adding that there is need to control expenses.
He said, “Islamic banking system in Pakistan is successful and facilitation of terrorists can also be stopped through this banking system, adding that whole world is trying to link everyone with the banking system as it has become a need of the hour.”
Now, he added, once again PML-N led government had started working on fast track to promote Islamic banking and preferred financing through Sukooks.
“ Islamic Banking must be our first choice,” he asserted adding that according to the Holy Quran, adopting interest-based trade and finance system meant to declare war with Allah Alminghty and His belevoved last Prophet Hazrat Muhammad (Peace Upon Him).
He said that riba-based economy was very destructive for the society as it led to injustice, inequality and frustration.
He informed that as result of his pursuance SBP and National Bank of Pakistan had withdrawn their appeals filed in the Supreme Court of Pakistan against the FSC deadline to fully shift to Islamic finance system.
He expressed his satlisfaction that Islamic banking was getting edge over the conventional banking by having strong base of assets in trillion of rupees.
To a demand by the Ulema, he assured that no conventional bank would be allowed to open a new branch.
Dar said that the government, along with State Bank of Pakistan, was taking all required steps and providing all maximum facilitation to the banks for financial inclusion wherein the people in remote and less developed areas of the country could be easily become a part of the finance system. This would generate many economic activities.
Addressing the seminar, Jamiat Ulema-e-Islam-F chief Maulana Fazlur Rehman Wednesday appealed to Prime Minister Shehbaz Sharif to implement the judgement of Federal Shariat Court regarding the abolition of usury in the country.
“There should be a positive reaction to the Shariat Court’s decision from the business community. Usury is the problem of not religious people only, but of everyone,” he pointed out.
“The Islamic banking system has over 5 trillion deposits until now,” he added. He also assured that resolutions of the seminar would be shared with the Prime Minister.
