The senate standing committee on interior has passed a bill seeking to impose a blanket restriction on the lending and borrowing money in the Capital territory with the purpose of accumulating interest. The bill titled ‘Islamabad Capital Territory Prohibition of Interest on Private Loans Bill, 2017’ aims to prohibit the business and practice of private money lending and advancing loans and transactions based on interest.
Presented by Jamaat-e-Islami Chief Senator Siraj ul Haq, the proposed bill has already been cleared by Ministry of Law and Justice and Council of Islamic Ideology whereas Islamabad Administration has submitted a feasibility report in this regard. However, the chief responsible branch of executive, i.e. Ministry of finance has not submitted its report on proposed bill till now. It will now be presented before senate and if approved will go to National Assembly and then will become a formal piece of legislation after being approved by the President of Pakistan.
Private interest has always been an issue of contention in Pakistan with one group favoring the individual borrowing and interest-based income and others severely opposing it in accordance with strict prohibition of usury in Islam. Religious parties have long called for a complete ban on interest of any kind and a sharp resort to historic recourse of interest-free lending system. Others cite the complex nature of modern global financial system and the potential costs of being left out of mainstream economic sector.
Islamic banking system has managed to arrange a compromise situation by tying the funds to business activities and by introducing the concept of profit/loss saving accounts instead of traditional interest-based fixed deposit accounts. This shows that the public wants to move away from Western lending system but financially cutting off a geographic area from rest of country does not seem feasible. Any effort to get rid of usury must be made on national level with the consensus of religious and economic experts.
