Judgement of Federal Shariat Court: Background, Introduction and Recommendations

According to Article 38-F of the Constitution of Pakistan, it is the responsibility of the State of Pakistan to make arrangements for the abolition of Riba as soon as possible. When the Federal Shariah Court was constituted by a constitutional order in 1980, economic laws were excluded from its jurisdiction for ten years. As soon as this restriction was over, the Federal Shariah Court was approached to end the interest-based system in the country. The esteemed court declared usury to be contrary to Islamic teachings and the aforesaid constitutional requirement.

The Supreme Court’s Shariat Applet Bench authenticated the decision in 1999. However, the matter was sent back to the Federal Shariat Court in 2022 for reconsideration of the decision. The verdict of this case was pronounced on 28th April 2022, 5th of Ramadan, which was considered very important by all sections of the country. The Institute of Policy Studies organized a consultation on April 29 to deliberate over this important decision, its potential implications, and future course of action. This document offers a brief introduction of the decision, and the suggestions made in the consultation are presented in this document in form of summarized points.