Dar says SBP, NBP to withdraw pleas against Islamic banking imposition in Pakistan.

ISLAMABAD -- The government has decided to call off the central bank and a state-owned commercial bank's appeals challenging the Federal Shariat Court's (FSC) directives to completely replace the conventional banking system with a Shariah-compliant one by the end of 2027.

In a press conference, Finance Minister Ishaq Dar announced that - with the permission of Prime Minister Shehbaz Sharif and in consultation with the State Bank of Pakistan (SBP) Governor Jameel Ahmed - the government will withdraw the SBP and National Bank of Pakistan's pleas against the FSC verdict.

He said that once the appeals are taken back from the Supreme Court, the government would try "its best" to implement an Islamic banking system in Pakistan as soon as possible.

The FSC verdict, in this case, came in April 2022. The Shariat court in its ruling had stressed on the federal and the provincial governments to amend the laws to make the banking system free of interest.

Dar said that the government was also determined to overcome all the challenges faced by the introduction of an interest-free banking system and the Centre would take all possible measures to take it forward.

In June this year, the State Bank of Pakistan (SBP) and four private banks challenged the decision of the FSC declaring the present interest-based banking system against the Sharia, directing the government to switch to an interest-free economy.

Salman Akram Raja filed an appeal on behalf of the SBP under Article 203F (1) of the Constitution with respect to the judgment passed by the FSC on April 28, 2022.

In its appeal, the SBP appreciated the spirit and the intent that led to the...