ISLAMABAD: The Attorney General for Pakistan (AGP) has asked the Federal Shariat Court (FSC) to leave the matter pertaining to Riba to the parliament.
A three-judge bench of the FSC, headed by Chief Justice Muhammad Noor Meskanzai, heard the petitions of Jamaat-e-Islami (JI) and others against the “interest”.
At the onset of the hearing, a lawyer recited verses from the holy Quran with translation against “interest”.
Justice Dr Syed Muhammad Anwar inquired what steps the federal government has taken so far for interest-free banking.
He then directed the attorney general to file details of measures taken by the government in the last 15 years.
The AGP informed that he could not get the details from the State Bank of Pakistan (SBP), adding soon he would inform the court about it.
He said the FSC in 2001 had ordered for interest-free Islamic financial system.
The court also gave directions to the parliament to legislate about the system, he further said.
He contended that the Court cannot direct the Parliament to pass law.
The FSC chief justice said the Parliament has to decide on passing the laws on interest-free Islamic financial system.
The attorney general said that it is the responsibility of the State to frame laws according to Shariah.
Upon that Justice Anwar questioned why the government is reluctant to legislate laws in accordance with Shariah.
The AGP said the main issue is the procedure to fulfill responsibility.
Justice Anwar asked why the State Bank has been adopting delaying tactics.
The AGP argued that power to declare Riba unlawful is with the government and not the Court.
Upon that the CJ FSC asked the attorney general that his arguments are without reference from Shariah.
The AGP replied he is not an Islamic scholar, and would plead on constitutional points.
Advocate Dr Babar Awan, appearing as amicus curae, stated that the FSC could examine whether a law is in accordance with Shariah or not?
He said every day we see news on TV channels about interest, adding that “Riba” exists in our financial system. There is no benefit of ignoring the facts, he further said.
Awan contended that except the FSC, no Court can hear this matter.
He said in the 18th Amendment, the Supreme Court has referred the matter pertaining to the constitution of Judicial Commission of Pakistan to the Parliament.
Its Parliament’s prerogative to legislate or not on the Court observation; however, the FSC cannot void any law, but it can give an opinion which is binding upon the government.
The counsel for Jamaat-e-Islami said he was unable to understand whether Babar Awan accepts the jurisdiction of the FSC on this matter or not.
The chief justice said they also do not know, but it would become clear upon the completion of all the arguments.
Iqbal Hashmi, the petitioner, requested the bench to summon the governor State Bank of Pakistan.
The chief justice remarked that let the arguments of all lawyers be completed after that they would decide who should be summoned.
The attorney general said the issue is not about the jurisdiction of the FSC, but about its directions to the parliament.
“The parliament, executive and other institutions of the state are actively engaged in the process of discharging the obligation of bringing laws of the country including the banking and financial laws in conformity with the injunctions of Islam,” said the AGP in his written reply before the FSC.
The federal government stated that any person in Pakistan desirous of engaging banking and other financial transactions in the Islamic mode can adequately do so as there was a robust and growing Islamic banking sector operating under the laws of Pakistan, the reply added.
A number of banking/financial institutions are operating and providing services in the Islamic mode under the guidance of prominent Ulema and religious scholars. This is an ongoing process and fully consistent with transformation of the banking sector from conventional to Islamic mode without creating any schism in the financial sector, which is inextricably linked with the global financial market, the reply said.
The banking in the Islamic mode now accounts for approximately 17pc of the country’s overall banking system in terms of assets while in terms of deposits the share was about 18.3pc as of December 2020, the government said.
At present, 22 Islamic banking institutions with five fully-fledged Islamic banks and 17 conventional banks having Islamic banking branches are providing Shariah-compliant products and services through their 3,456 branches along with 1,683 windows at Islamic banking counters at conventional branches across the country.
The government reminded the FSC that through legislative and executive measures, a robust interest-free banking sector had developed in the country and was successfully providing services to the people.
Appropriate amendments have also been made by the legislature to the State Bank of Pakistan Act 1956, the Banking Companies Ordinance 1962, and a newly-enacted Companies Act 2017.
Copyright Business Recorder, 2021
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