Editorial Article: The Riba¯ Case Pending for three Decades: The Federal Shar¯ı‘at Court, Pakistan may Fulfill its Constitutional Responsibility by Outlawing the Interest

Abstract

While Islamic banking is being promoted by the State Bank of Pakistan (SBP) working parallel with the
conventional banking since 2002, the Constitution of Pakistan requires that interest must be outlawed from
the economy as early as possible [Article 38 (f)]. The legal trajectory of interest made its way to the Federal
Shar¯ı‘at Court (FSC) after the 10-years moratorium on adjudicating fiscal and banking matters ended at the end
of May 1990. The FSC and subsequently the Shar¯ı‘at Appellate Bench (SAB) of the Supreme Court of Pakistan
delivered their landmark judgments in 1991 and 1999 respectively, but the state officials opted to hide behind
some constitutional provisions, or the presumed view of some jurists /scholars to plead that the ‘interest" was
not that rib¯a as prohibited by Qur’¯an.
Although, the connotation of rib¯a has long been agreed at the level of Islamic ummah to include modern
commercial interest in rib¯a, and efforts for evolving ‘interest-free’ banking and finance system are underway
also including Pakistan, but there have been some hindrances in implementation of Islamic injunctions and the
Shar¯ı‘at Courts’ judgments. The rib¯a case being reheard in the FSC since 2013, after it was remanded back
by the SAB in 2001 is becoming gradually complicated. The debt trap for Pakistan’s economy is becoming
increasingly painful requiring to transfer almost all resources for servicing the debt. However, little effort has
been made to transform the economy of Pakistan to risk and reward sharing and cooperative bases in the light
of Islamic principles.