Pakistan sets Jan. 1, 2028 deadline to eliminate ‘riba’ or interest from country

A Pakistani man counts Pakistan's rupees at his shop in Karachi on May 16, 2019. (AFP/File)
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Updated 21 October 2024
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Pakistan sets Jan. 1, 2028 deadline to eliminate ‘riba’ or interest from country

  • Pakistan’s Federal Shariat Court in 2022 ordered government to eliminate interest by 2027
  • The FSC ruled that Islam prohibits the use of interest in all its forms and manifestation 

ISLAMABAD: Pakistan’s parliament on Sunday passed a historic constitutional amendment bill that stipulates all forms of “riba” or interest must be eliminated before Jan. 1, 2028, with the move likely to promote Islamic banking in the country. 

Pakistan’s Federal Shariat Court (FSC) directed the government in April 2022 to eliminate interest by 2027, maintaining that Islam prohibited it in all its forms and manifestations. The FSC determines whether Pakistani laws comply with Islamic law or not. 

Pakistan’s ruling coalition government in the wee hours of Sunday passed the constitutional amendment bill by the required two-thirds majority in both houses of parliament. The amendment mostly contains reforms related to the country’s judiciary, which has stirred political debate in the country. The amendment changed the previous Article 38 (f) of Pakistan’s constitution, which called for the elimination of interest from the country “as early as possible.”

“In the Constitution, in Article 38, for paragraph (f), the following shall be substituted, namely: (f) eliminate riba completely before the first day of January, two thousand twenty-eight,” a copy of the 26th Constitutional Amendment Bill, 2024, states. 

Last year, Pakistan’s central bank set a target to increase the share of Islamic banking in the country to 35 percent by 2025. At present, the share of Islamic banking in the overall commercial banking system in the country is 20 percent.

Pakistan has six full-fledged Islamic banks offering a wide range of products and the annual growth rate of Islamic banks’ assets and deposits has been 25 percent and 22 percent respectively over the last five years, according to the central bank’s data.


Tens of thousands flee northwest Pakistan over fears of military operation

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Tens of thousands flee northwest Pakistan over fears of military operation

  • More than 70,000 people, mostly women and children, have fled remote Tirah region bordering Afghanistan 
  • Government says no military operation underway or planned in Tirah, a town in Khyber Pakhtunkhwa province

BARA, Pakistan: More than 70,000 people, mostly women and children, have fled a remote region in northwestern Pakistan bordering Afghanistan over uncertainty of a military operation against the Pakistani Taliban, residents and officials said Tuesday.

Pakistan’s Defense Minister Khawaja Mohammad Asif has denied the claim by residents and provincial authorities. He said no military operation was underway or planned in Tirah, a town in Khyber Pakhtunkhwa province.

Speaking at a news conference in Islamabad, he said harsh weather, rather than military action, was driving the migration. His comments came weeks after residents started fleeing Tirah over fears of a possible army operation.

The exodus began a month after mosque loudspeakers urged residents to leave Tirah by Jan. 23 to avoid potential fighting. Last August, Pakistan launched a military operation against Pakistani Taliban in the Bajau r district in the northwest, displacing hundreds of thousands of people.

Shafi Jan, a spokesman for the provincial government in Khyber Pakhtunkhwa, posted on X that he held the federal government responsible for the ordeal of the displaced people, saying authorities in Islamabad were retracting their earlier position about the military operation.

Khyber Pakhtunkhwa Chief Minister Suhail Afridi, whose party is led by imprisoned former Prime Minister Imran Khan, has criticized the military and said his government will not allow troops to launch a full-scale operation in Tirah.

The military says it will continue intelligence-based operations against Pakistani Taliban, who are known as Tehrik-e-Taliban Pakistan, or TTP. Though a separate group, it has been emboldened since the Afghan

Taliban returned to power in 2021. Authorities say many TTP leaders and fighters have found sanctuary in Afghanistan and that hundreds of them have crossed into Tirah, often using residents as human shields when militant hideouts are raided.

Caught in the middle are the residents of Tirah, who continued arriving in Bara.

So far, local authorities have registered roughly 10,000 families — about 70,000 people — from Tirah, which has a population of around 150,000, said Talha Rafiq Alam, a local government administrator overseeing the relief effort. He said the registration deadline, originally set for Jan. 23, has been extended to Feb. 5.

He said the displaced would be able to return once the law-and-order situation improves.

Among those arriving in Bara and nearby towns was 35-year-old Zar Badshah, who said he left with his wife and four children after the authorities ordered an evacuation. He said mortar shells had exploded in villages in recent weeks, killing a woman and wounding four children in his village. “Community elders told us to leave. They instructed us to evacuate to safer places,” he said.

At a government school in Bara, hundreds of displaced lined up outside registration centers, waiting to be enrolled to receive government assistance. Many complained the process was slow.

Narendra Singh, 27, said members of the minority Sikh community also fled Tirah after food shortages worsened, exacerbated by heavy snowfall and uncertain security.

“There was a severe shortage of food items in Tirah, and that forced us to leave,” he said.

Tirah gained national attention in September, after an explosion at a compound allegedly used to store bomb-making materials killed at least 24 people. Authorities said most of the dead were militants linked to the TTP, though local leaders disputed that account, saying civilians, including women and children, were among the dead.