Page 49 - CMA Journal (Mar-Apr 2025)

Focus Section

National savings must increase through
Figure 3: Key Challenges to Riba-Free Transformation
motivational initiatives combined with
education campaigns for the public, and
enhanced transparency in Islamic banking,
combined with the development of
competitive Shariah-compliant investment
options that adhere global financial
standards to fulfill this vision. The target
Dominance Regulatory Public Debt Human Global
of Interest- and and Capital Financial involves doing away with interest-based
transactions while building an effective and
Based Legal Sovereign Deficit Ties
Instruments Gaps Financing universal financial system that serves all
segments of society. The nation has less
Source: Author than three years until implementation, so
the economic power of institutions will play a critical role in
Proposed RoadMap towards Riba-Free achieving this transformation. Pakistan can remove its
Financial system interest-dependent transactions while meeting
international financial operating standards. National
Achieving a riba-free financial system in Pakistan requires a
willingness, combined with institutional backing and
systematic, multi-phased approach to progress. The
adequate execution, will allow Pakistan to lead other
government should introduce Sukuk alongside nations during their transition toward interest-free
conventional treasury bills and government bonds to ensure
economic systems. Although accomplishing this goal will
financial stability and gradually replace all interest-based be difficult, it remains within reach when people make the
instruments with Islamic financial alternatives. Developing
right decisions.
innovative Shariah-compliant products, such as Islamic repo
markets, is essential to address the shortage of liquidity Reference
management tools.
[1] Jan-mohammad, M. B. (2024, December 6). Islamic banking and
Implementing a standardized Shariah governance model is finance in Pakistan: Challenges and roadmap. Business Recorder.
crucial to harmonize regulations and build customer trust. https://www.brecorder.com/news/40336131/islamic-banking-and-fi
Enhancing the effectiveness of law enforcement through nance-in-pakistan-challenges-and-roadmap
procedural reforms and introducing training programs to
[2] SBP Quarterly Islamic Banking Bulletin October-December 2024
educate professionals in Islamic finance are also key steps. http://sbp.org.pk/ibd/Bulletin/2024/Islamic%20Banking%20Bulletin
The use of hybrid debt instruments for public debt %20December%202024.pdf
restructuring, coupled with partnerships with international
[3] Al-Zaqeba, M.A.A. and Basheti, I.A., (2024). Measurement Problems in
stakeholders, can help mitigate risks associated with
Interest-Free Financial Instruments. Pakistan Journal of Life and
conventional financial systems. Social Sciences, 22(1), pp.5558–5575. https://doi.org/10.57239/
The development and training of Islamic finance specialists PJLSS-2024-22.1.00410
depend on global collaboration to ensure the availability of [4] KPMG. (2024). Pakistan Banking Perspective 2024. [online] Available
qualified professionals. By advancing these efforts, Pakistan at: https://assets.kpmg.com/content/dam/kpmg/pk/pdf/2024/05/
can successfully transition to a riba-free Islamic economy Pakistan-BankingPerspective-2024.pdf [Accessed April 9. 2025].
that supports both stability and sustained growth. The [5] Hussain, J. (2024). Is an interest-free economy possible? [online] The
2024–2028 strategic plan outlines a step-by-step framework Express Tribune. Available at: https://tribune.com.pk/story/2513980/
to expand Islamic banking operations, reorganize financial is-an-interest-free-economy-possible [Accessed April 9. 2025].
systems, and convert existing banks to full Shariah
[6] Jamil, S.H. (2024). Towards a Riba-Free Pakistan: 26th Constitutional
compliance. Amendment and the Way-Forward. Journal of Islamic Business and
Management, 14(02), pp.86–88. [6]. https://doi.org/10.26501/
Table 4: Proposed Roadmap to
jibm/2024.1402-001
Implementation: 2024–2028
[7] Sheikh, R., Abdul Rashid, & Muhammad Ayub. (2024). Federal Shariat
Phase Key Actions
Court's Judgment on Ribā-Free Economy of Pakistan: Challenges in
Phase 1 (2024–2025) Expand Islamic banking outreach; Implementation and the Way Forward. Islamic Banking and Finance
incentivize Islamic Sukuk over bonds. Review, 11(1), 47-79. https://doi.org/10.32350/ibfr.111.03
Phase 2 (2025–2026) Restructure government borrowing;
introduce Islamic alternatives for savings About the Author: The author holds a PhD in Economics, with core
accounts, pensions, and insurance. research interests in development economics, gender studies, labor
economics, and international economics. She has an extensive
Phase 3 (2026–2027) Begin conversion of state-owned academic profile, having authored 22 research articles in reputable
conventional banks; strengthen legal
journals and presented her work at over 16 national and international
backing for riba elimination.
conferences. Currently, she serves as Assistant Manager of Research and
Phase 4 (2027–2028) Complete transition for regulatory Publication at Saviours, where she continues to contribute to scholarly
authorities; remove remaining interest- research and knowledge dissemination in her areas of expertise.
based financial instruments.
Source: Author
ICMA’s Chartered Management Accountant, Mar-Apr 2025 47