FSC declares Riba based banking system against Shariah.

ISLAMABAD -- The Federal Shariat Court (FSC) on Thursday announced its verdict on Riba (interest) based banking system and termed it against the Shariah.

The three-member FSC comprising Chief Justice Muhammad Noor Maskanzai, Justice Dr Syed Muhammad Anwar and Justice Khadim Hussain M. Sheikh announced its reserved verdict on Riba. The FSC had reserved its verdict in the case on April 12.

The court accepted the petition and declared that the prohibition of Riba was complete and absolute in its all forms and manifestation according to the Injunctions of Islam in accordance with the Holy Qur'an and Sunnah.

"Therefore, for all detailed reasons deliberated on this judgement the charging of any amount in any manner over the principle amount of a loan or debt is Riba which is completely prohibited according to the Holy Qur'an and Sunnah of Holy Prophet (SAW)."

The court ruled that the federal and provincial governments must amend relevant laws and issued directives that the country's banking system should be free of interest by December 2027.

The court observed that banks were receiving more than the loan amount when fell under the category of usury. "The Islamic banking system is risk-free and against exploitation," Justice Dr Syed Muhammad Anwar remarked.

Justice Anwar said almost two decades had lapsed but the...