A parliamentary panel on Friday constituted a special committee comprising bankers, parliamentarians, leading religious scholars and representatives from relevant ministries and the central bank to move quickly towards a complete Islamic financial system in the country.
The National Assembly’s standing committee on Finance & Revenue presided over by PTI’s Faiz Ullah also expressed dissatisfaction over the slow progress on eradication of riba and desired that at least the government should shift its deposits to the Islamic banking.
The committee ordered that the State Bank of Pakistan (SBP) and Ministries of Finance and Law to immediately arrange a meeting with the Maulana Akbar Chitrali, Dr Aisha Ghaus Pasha, Amjad Ali Khan, Abdul Wasay and Syed Javed Hasnain, MNAs for concrete solution and speedy way forward on complete riba-free banking system in the country. The committee should also engage Maulana Taqi Usmani and suggest laws required to be amended in this regard.
A complete transition plan should also be presented to the NA panel before its next meeting, Mr Faiz Ullah said. All members agreed that at least the government should shift all its deposits to shariah-compliant mode for which no legislation was required.
They agreed that continuation of an interest-based banking system was a collective failure of all including various institutions and members of the committee despite the fact that all believed it was ‘an open war’ against the Allah Almighty.
While discussing the Eradication of Riba Bill, 2019, moved by Mr. Abdul Akbar Chitrali, MNA, the committee expressed its dissatisfaction on the presentation given by the SBP.
Dr Pasha said there was a lot of scope and appetite for Islamic banking from an economic point of view and the government should come up with a plan for incremental growth that would increase financial inclusion. She said the Islamic banks like Alfalah and Meezan were showing tremendous profits and the government, parliamentarians and regulators should put their act together and make a concerted push.
Additional Secretary Finance Dr Arshad Mahmood agreed that Islamic banking had become a reality now and demand was coming up from depositors as a lot of people now considered conventional banking as a curse.
The committee was told that the share of Islamic banking currently stood at 16.6 per cent. The members expressed dissatisfaction that 98pc of government business was still based on interest-based systems.
The committee also expressed dissatisfaction over SBP’s strategic plan 2020-25 that envisaged 30pc share of deposits in Islamic banking, 35pc share of branch network, 8-10pc of agriculture and small and medium enterprise financing.
A representative of the law ministry said the apex court had ordered shifting 90pc of the banking to Islamic mode in 1990 but banking industry with the support of then government went into review appeal in 2004 saying the system would not afford an abrupt shift and gradual transition be allowed.
The court remanded the case to the Islamic Ideology Council and Federal Shariah Court (FSC). He said the FSC held only one hearing of the case over the last four years and unless the case was decided, no progress could be made.
Source DAWN