On prime minister's directive: Govt constitutes task force for elimination of Riba

ISLAMABAD: On the directive of prime minister, the government has constituted a task force for the elimination of Riba. The government has decided to file a review petition in the Supreme Court of Pakistan for elimination of Riba from the banking sector and all steps will be taken to implement this decision in true letter and spirit.

The official announcement made by the Ministry of Finance on Tuesday stated that Federal Minister for Finance and Revenue Miftah Ismail held a meeting with renowned Islamic scholars Mufti Muhammad Taqi Usmani, Dr Hussain Akbar, Dr Raghib Naeemi and Shaikh Azhar Iqbal on the implementation of Shariah in the banking system and elimination of Riba from Pakistan at the Finance Division.

The Minister of State for Finance and Revenue, Dr Ayesha Ghous Pasha, SBP governor, chairman SECP, secretary Finance, secretary EAD, secretary Law & Justice and senior officers attended the meeting. The meeting reviewed the current state of the Islamic Finance operations in the country, order of the Supreme Court and Federal Shariat Court’s decision. The meeting discussed and sought guidance in certain financial areas requiring more clarity for the implementation of Shariah in the financial system of the country.

Renowned Islamic Scholar Mufti Muhammad Taqi Usmani and others shed light on the different aspects of Islamic financial system and gave their suggestions for designing a framework for handling of public debt through Shariah-complaint financing/debt structure. The Islamic scholars also proposed suggestions for the implementation of banking system on Islamic lines for monetary policy and Islamic interbank system. It was also suggested that a separate section should be created in the Finance Ministry on Islamic financing.

The chair emphasising the directive of the Prime Minister on the implementation of Riba free system in Pakistan endorsed the suggestions of religious scholars and asked the relevant authorities to chalk out the programme based on discussions. The chair further directed for arrangement of meeting of religious scholars with banking sector for more guidance and clarity on the issues on Shariah-compliant mechanism. Official sources said that the prime minister of Pakistan has directed to constitute a taskforce to propose a way forward and a concrete plan for elimination of Riba from Pakistan in the light of the Federal Shariat Court's decision in Shariat Petition No. 30/L/1991 dated 28-04-2022. In this regard, a meeting was held on 19-07-2022 under the chairmanship of the federal minister for Finance. Composition of the Taskforce:

i) Federal Minister for Law & Justice, Chairman ii) Maulana Asad Mahmood, MNA Member iii) Riaz Pirzada, MNA Member iv) Qamar Zaman Kaira (Representative, of (PPPP) Member v) Governor State Bank of Pakistan, Member vi) Chairman, SECP, Member vii) Secretary, Finance Division, Member viii) Secretary, Economic Affairs Division, Member ix) Secretary, Law & Justice Division, Member x) Mufti Taqi Usmani, Member xi) Sheikh Azhar Iqbal Member xii) Mufti Qasim Attari Member xiii) Dr. Muhammad Hussain Akbar Member xiv) Dr. Raghib Naeemi Member xv) Additional Finance Secretary (IF), Finance Division Secretary

According to Terms of Reference of Task Force suggested to (a) Assess and review the current state of Islamic Finance operations in the country (b) Review the order of the Supreme Court whereby the case was remanded back to FSC and review the order of the FSC to assess whether all the questions framed in the Supreme Court order have been suitably addressed in current FSC order. (c) Identify areas where implementation of the FSC order can require more focus and effort, for example foreign currency finance and foreign trade, and suggest a mechanism and plan in these particular cases. (d) Identify the gaps in the Federal and Provincial laws and suggest appropriate amendments in the laws so as to align them with the principles of Shariah with respect to Riba. (e) Recommend practical solutions for conversion of the Public Debt into Shariah compliant financing/debt. (f) Provide guidance on Shariah compliant monetary policy and Islamic interbank offer rates (replacement of Kibor). (g) The committee shall meet at least monthly or as and when required.