Constitutional amendment proposes to end interest system in Pakistan by Jan 1, 2028

Pakistan is aiming to eliminate Riba (interest-based banking) "as far as practicable by January 1, 2028," according to a draft constitutional amendment approved by a special parliamentary committee.

The ruling coalition is seeking to amend clause (f) of Article 38, which currently states the goal is to "eliminate riba as early as possible." The proposed change specifies the 2028 deadline.

This amendment is part of 26 changes proposed to the Constitution and was initiated by the Jamiat Ulema-e-Islam.

On April 28, 2022, the Federal Shariat Court mandated that the government must remove Riba by December 31, 2027, emphasizing its prohibition in all forms based on Islamic principles and teachings of the Quran and Sunnah.

The court highlighted that the five-year timeframe should be adequate for transforming Pakistan’s economy into one that is equitable, asset-based, risk-sharing, and free from interest.

The ruling was issued by a three-judge bench led by Chief Justice Muhammad Noor Meskanzai, alongside Justices Dr. Syed Muhammad Anwer and Khadim Hussain M Shaikh.

The comprehensive 298-page judgment clarified that any interest related to government borrowing, whether domestic or foreign, is considered Riba and is prohibited by Islamic law.