A Short History of Riba in pakistan ======================= Below are chronicle events of government level initiatives. 1969 Upon an enquiry made by the State Bank of Pakistan, the Islamic Advisory Council in its December1969 session held in Dacca, declared interest on bank loans, savings certificates, prize bonds and postal life insurance schemes etc forms of “riba” and thus unIslamic. The Council recommended forming a committee to address the modalities of transition towards an interest-free economy. 1973 Article 37 of the Constitution of Pakistan categorically stipulated that removal of interest-based transactions from the economy is an official responsibility of the government. The Constitution set a nine-year limit for the Islamization of the entire legal, financial and bureaucratic framework of the country. 1977 On 29 September, President Zia-ul-Haq commissioned the Islamic Ideology Council to prepare a working proposal for an interest-free economy. The Council formed a 15-member panel of distinguished bankers and economists that submitted its proposal after intense research-work. 1980 On 25 June, the Islamic Ideology Council presented another report- the redrafted and revised proposal- to President Zia-ul-Haq but in vein. Later, upon the persuasion of Dr. Israr Ahmed,the report was made public. A summary of this report was published by Siddiqui Trust, Karachi. 1981 A Federal Shariat Court was established but its hands were tied by keeping financial matters out of its jurisdiction. As “alternatives” to interest, PLS and mark-up schemes were initiated. Ulema denounced both: the old wine of interest, said the Ulema, was now being marketed in new bottles. 1988 On 15 June 1988 President Zia-ul-Haq promulgated the Nifaz-e-Shariat Ordinance, constituting an Islamic Economy Commission. It was headed by Dr Ehsan Rasheed, former Vice Chancellor, University of Karachi. After a year, the commission became defunct, following the change in the government. The Nifaz-e-Shariat Ordinance was not even presented in the Benazir- led parliament. 1991 Under the directive of Prime Minister Nawaz Sharif, a committee was formed led by Professor Khursheed Ahmed. Its task was to work out a strategy to rescue the country from the crushing burden of foreign debt, and to put it on the track of self reliance. With much effort, the report was completed in a short time. It was submitted on 10April 1991. Another commission was set up under the aegis of the State Bank of Pakistan on 11 May 1991 with the aim to propose steps towards the Islamization of economy. Yet again, the commission was rolled up as soon as the government changed hands, from Nawaz Sharif to Benazir Bhutto. A committee working under Maulana AbdulSattar Khan Niazi was also assigned to prepare a blueprint of an interest-free economy. Its recommendations were duly submitted. On 14 November 1991, the Federal Shariat Court declared bank interest “riba” after a marathon hearing. This was the highest officially recognized proclamation classifying bank interest as riba. Top Ulema, economists, and lawyers of the country submitted their observations during the case. The government was given six months to initiate the transition to an interest-free economy. The government of Mian Nawaz Sharif filed a petition in the Supreme Court challenging this judgment. For the next eight years, the appeal could not be heard in the apex court for one reason or another. Thus the matter remained unresolved. 1997 On 23 February1997, Prime Minister Nawaz Sharif formed one more committee under the leadership of Raja Zafarul Haq to reconsider the recommendations for a riba-free economy in the light of the concerns and objections raised. Once again, no practical outcome emerged from the suggestions put forward. 1999 The Shariat Appellate Bench of the Supreme Court of Pakistan heard the petition filed by the government against the 1991 Federal Shariat Court judgment. On 23 December the Bench upheld the FSC decision, turning down the appeal. The government received extension upto 30 June 2001 to eradicate riba from the economy. The government stealthily pushed forward another appeal challenging the decision, though this time the ostensible petitioner was a public bank, UBL. 2001 Following the above petition, the Supreme Court extended the 30 June 2001deadline given to the government by another year. 2002 At the start of the month of May, the Advocate General of Pakistan officially stated that the government would now draw advice from such Ulema who do not deem bank interest haram (forbidden) as riba. Dr Israr Ahmed published a biting riposte, soaked in dismay, in a newspaper advertisement giving a clarion call to the Ulema: [It is curious that] while the Indian forces are biding time on the borders, anxiously looking forward to a showdown, our government is dreaming up clever ploys to carry on the war against Allah and the Prophet. The religious- political leaders should wake up to the statement issued by the Advocate General which says, firstly, that for reviewing the [Shariat Court] decision in favour of eliminating bank-interest, opinions of such Ulema (sic) will be sought who do not consider bank interest riba; secondly, role-model guidance will be sought from such Muslim countries that have interest-free banking running parallel to conventional banking. The religious-political leadership should demand the implementation of the Supreme Court decision by the 30 June 2002 deadline.At such a decisive crossroads, the demure silence of the Ulema and the Mashaikh as well as of our religious parties will make them the object of a severe Quranic censure: “Why do not the rabbis and the priests forbid their evil speaking and their devouring of illicit gain? Verily evil is their handiwork.” (Al Maida: 63) Sadly, our religious leaders paid no heed to the appeal. Soon after, the government relieved the world-renowned Alim, jurist and Islamic economist, Justice Mufti Taqi Usmani from the seat of the Shariat Appellate Bench, and inducted two lesser-known gentlemen in his stead. On 6 June, the Supreme Court Appellate Bench began the hearing of the case. According to the standard procedure, the same bench hears the appeal for reviewing a judgment that had earlier made the judgment. Disregarding the procedure, a newly composed bench heard the appeal. The advocates of religious parties objected to the composition of the bench and asked the court to summon all the earlier stakeholders. The court responded that it would not begin the hearing before ascertaining the validity of the appeal. But all the same the hearing began. The state prosecutors raised some objections against the Shariat Court judgment. In all fairness, the Ulema and the religious parties should have been asked for a counterresponse. But the court, in strange urgency, upheld the appeal and turned down the Shariat Court judgment. In practical collective matters of life, the worst of sins is dealing in riba. Allah Subhanahu wa Ta’ala and His messenger (Sallalahu AlaihiWassallam) have declared war on people involved in riba-based dealings.
Posted on: Fri, 14 Jun 2013 15:12:14 +0000
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