KARACHI: Irfan Iqbal Sheikh, President FPCCI said that the business community supports the transformation of Pakistan’s economy and banking system to a Riba-free system in accordance with the decision of Federal Shariat Court (FSC), which requires to ban the Riba (interest) from the economy and banking system completely in a period of five years.

The FSC has set 2027 as the deadline for the complete ban on interest; terming it an enough time period to implement the decision.

The verdict requires the government to make the necessary regulatory changes to facilitate the migration to interest-free financial system possible, he added.

Sheikh maintained that Islamic banking has been enhancing operations successfully and prudentially in Pakistan; and, the market share of deposits and assets of Islamic banking in the total banking industry was 19.4 percent and 18.6 percent, respectively, for the year 2021. Additionally, net financing by Islamic banking institutions rose by 38.1 percent in 2021; which is a very strong growth in financing by any standard.

He apprised that on a macroeconomic scale, Pakistan’s total revenue collection is expected to be Rs 7 trillion in fiscal year 2022-23 and out of which Rs 4 trillion will go towards debt servicing and interest payments; which will be approximately 56 percent of the total collection.

Suleman Chawla, SVP FPCCI, has demanded that Ministry of Finance, Ministry of Law, Banking Council and other stakeholders should come together and work towards making Pakistan a Riba-free country.

Furthermore, Irfan Iqbal Sheikh proposed the SBP to come up with a clear roadmap and framework for conversion of the interest-based system to an interest-free system in the permitted timeframe of five years; in line with FSC’s verdict and without employing any delaying tactics.

Copyright Business Recorder, 2022