SBP challenges Shariat Court interest ban verdict in Supreme Court

F.P. Report

ISLAMABAD: The State Bank of Pakistan on Saturday filed a petition in the Supreme Court challenging the decision of Federal Shariat Court (FSC) against interest.

The petition has made finance ministry, law ministry, chairman banking council and others as respondents in the case.

The bank requested that the appeal against the decision of the FSC be allowed, and the extent of the points raised in the decision be amended.

The petition was filed by Salman Akram Raja on behalf of the State Bank.

The central bank in its petition stated that the Shariat Court did not consider the injunctions of the Supreme Court Remand Order while issuing the verdict.

The Islamic court has declared the saving certificates un-Islamic, the petition said adding that the FSC ordered to amend the rules.

On April 28, the Federal Shariat Court ordered establishing Riba-free banking system in the country as per the Islamic teachings while declaring that the prohibition of Riba (interest) was absolute in all its forms and manifestations according to the injunctions of Islam and in accordance with the Holy Quran and Sunnah. Therefore, it should be eliminated from the country by Dec 31, 2027.

Declaring the Interest Act of 1839, West Pakistan Money Laundering Act and other interest-related laws against the Islamic Shariah, the FSC ordered the government not to borrow any loan on interest from now on from inside or outside of the country.

The FSC, in its decision, said that it was incumbent upon the government to eliminate loan borrowing on ‘interest’. “We will have to get rid of the system at all costs. The Islamic banking is risk-free and is an antithesis of the system of exploitation,” read the verdict.

The FSC bench declared that establishing Riba-free banking system in the country as well as throughout the entire world is possible.

The decision came after the matter was pended for 20 years.