State bank of Pakistan (SBP) on Saturday challenged the ruling of the Federal Shariah Court (FSC) for the abolishment of ‘Riba’ in the Supreme Court.
The petition was filed by Salman Akram raja on behalf of the central bank. Ministry of Finance, Ministry of Law, Chairman Banking Council and others have been made respondents on the plea.
The plea stated that the Federal Sharia Court (FSC) didn’t take due consideration of the orders passed by the top court while issuing a judgment on interest.
It also stated that the FSC had declared the rules regarding Saving Certificates contrary to Islam and ordered amendments in the rules.
The petition prayed the court to approve the appeal against Shariah Court verdict and that the apex court orders amendments to the FSC April 28 order in the light of issues raised in the appeal.
On April 28, three-member FSC comprising Chief Justice Muhammad Noor Maskanzai, Justice Dr Syed Muhammad Anwar and Justice Khadim Hussain M. Sheikh announced its verdict on Riba (interest) based banking system and termed it against the Shariah.
The court accepted the petition and declared that the prohibition of Riba was complete and absolute in its all forms and manifestation according to the Injunctions of Islam in accordance with the Holy Qur’an and Sunnah.
“Therefore, for all detailed reasons deliberated on this judgement the charging of any amount in any manner over the principle amount of a loan or debt is Riba which is completely prohibited according to the Holy Qur’an and Sunnah of Holy Prophet (SAW).”
The court ruled that the federal and provincial governments must amend relevant laws and issued directives that the country’s banking system should be free of interest by December 2027.
The court observed that banks were receiving more than the loan amount when fell under the category of usury. “The Islamic banking system is risk-free and against exploitation,” Justice Dr Syed Anwar remarked.
Justice Anwar said almost two decades had lapsed but the governments had not taken any decisions against the interest system.
The court also declared all the provisions of the Interest Act 1839, which facilitate interest, as unlawful. The court said the prohibition of Riba was the cornerstone of the Islamic economic system.
The FSC said the speedy proliferation and exponential growth of interest-free banking not only in Pakistan but also in the whole Islamic world and even worldwide was a reality that had established that the interest-free banking system was not only practicable but feasible too.