Business Community Supports Transformation Of Economy Into Riba-free System; Riaz Khattak

PESHAWAR, (UrduPoint / Pakistan Point News - 5th Oct, 2022 ) :Senior Vice President of Pakistan Businesses Forum (PBF) Muhammad Riaz Khattak has said the business community supports the transformation of Pakistan's economy and banking system into a riba-free system in accordance with the decision of Federal Shariat Court.

Talking to the delegation of Peshawar Small Chamber of Commerce here Wednesday, he said Shariat Court decision requires elimination of riba (interest) from the economy and banking system completely over the period of next five years, said a press release issued here on Wednesday.

"The Shariat Court has set 2027 as the deadline for the complete ban on interest; terming it enough time to implement the decision. The verdict requires the government to make the necessary regulatory changes to facilitate the shifting on interest-free financial systems possible", he added.

Riaz Khattak called upon transforming Pakistan's economy and financial system into an equitable, asset-based, risk-sharing, and interest-free economy to avoid the ills and risks that come along with an interest-based system.

He maintained that Islamic banking has been enhancing their operation successfully and prudently 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, he said, net financing by Islamic banking institutions has increased by 38.1 percent in 2021, which is very strong growth in financing by any standard. The PBF official also said that on a macroeconomic scale, Pakistan's total revenue collection was expected to be Rs 7 trillion in fiscal year 2022-23 and out of which Rs 4 trillion would go towards debt servicing and interest payments, which would be approximately 56 percent of the total collection.

PBF Vice Chairman KP chapter, Malik Fareed has also proposed that SBP should come up with a clear road-map and framework for conversion of the interest-based system to an interest-free system in the stipulated time-frame of five years in line with the FSC's verdict and without employing any delaying tactics.

He stressed that the Ministry of Finance, Ministry of Law, Banking Council and other stakeholders should come together and work towards making Pakistan a riba-free country.