Pakistan Pushes for Interest-Free Economy and Islamic Banking

The Pakistani government is moving towards an interest-free economy and establishing Islamic banking branches nationwide. This is in line with the Federal Shariat Court’s ruling to abolish the interest-based system. The government is working to implement the court’s directives and has received support from friendly countries. The finance minister highlighted the importance of promoting agricultural growth, tax enforcement, and reforms in State Owned Enterprises.

Pakistan Moves Towards Interest-Free Economy as per Federal Shariat Court Directives

The Federal Minister for Finance and Revenue, Muhammad Aurangzeb, has announced that Pakistan is working to transition to an Islamic interest-free fiscal system in accordance with the directives of the Federal Shariat Court (FSC). The government aims to implement the FSC’s verdict to abolish the prevailing interest-based system. Currently, Pakistan’s foreign exchange reserves depend heavily on interest, with the country expecting a new tranche of $1.19 billion from the IMF this week. To promote an interest-free economy, the government plans to establish Islamic banking branches nationwide and support the growth of the agricultural and livestock sectors. The Finance Minister emphasized the significance of enhancing the tax-to-GDP ratio, currently at 9%, through tax enforcement and expansion of the tax base. Pakistan’s economic growth is supported by friendly nations both domestically and internationally, and the government is focused on transforming tax, energy, and State Owned Enterprises (SOEs).

Scroll to Top