Page 8 - CMA Journal (Mar-Apr 2025)

Exclusive Interview

Subsequently, the Council prepared a
comprehensive report titled Islamic
Economic System, which consolidated
and organized all available sources
related to Islamic economic teachings.
In addition, the Council developed
and submitted three reports to the
government aimed at aligning the
prevailing system of insurance with
Islamic principles. These reports were
titled Islamic Insurance System, Bima
wa Qawaneen-e-Bima, and Report on
Islamic Insurance System.

In its first report, Interest-Free
Banking, the Council proposed a Mr. Muhammad Yasin, Vice President ICMA & Chairman Research & Publications Committee in a
meeting with Allama Muhammad Raghib Hussain Naeemi, Chairman, Council of Islamic Ideology (CII)
three-phase plan for the practical
implementation of a non-
interest-based financial system. In the first phase, it
more attainable. Furthermore, to promote and
recommended eliminating all conventional interest-
implement an Islamic banking system, the Council
based practices from government financial transactions,
endorsed the Shariah standards developed by the
with July 1, 1980, set as the target date for
Accounting and Auditing Organization for Islamic
implementation. The second phase, scheduled for July 1,
Financial Institutions (AAOIFI).
1981, involved the development of new schemes in light
of the Council’s recommendations. The third phase was ICMA: What further reforms are needed to make
set for implementation on January 1, 1982, focusing on Pakistan's economy fully interest-free?
the complete elimination of interest from domestic
Chairman CII: To completely reform Pakistan's economic
banking operations, followed by proposals for
system, a range of comprehensive reforms are required.
eliminating interest at the international level. These
First and foremost, this is a multifaceted and
dates were suggested at the time of the report’s initial
broad-based task; therefore, sincerity and genuine intent
drafting; however, implementation has yet to take place.
are essential for its execution. Secondly, the Islamic
Nonetheless, these timelines were provided for
financial system, which has already been partially
convenience, while the key emphasis remains on the
implemented in our country, needs to be further
phased approach outlined by the Council. If these stages
promoted and expanded. One of the most effective steps
are kept in view during practical efforts to eliminate
in this regard would be for the government to withdraw
interest, the goal of an interest-free economy will be
its funds from interest-based banks and deposit them in
Islamic banks. Gradually, within these non-interest-
based banks, the core Islamic financing methods—such
In June 1980, the Council as musharakah (partnership) and mudarabah (profit-
sharing)—should be practically implemented and
submitted a report titled enforced. Recently, under the 26th Constitutional
Interest-Free Banking to the Amendment, the elimination of interest by January 1,
2028, has been included as a goal. Therefore, immediate
government, which the action is essential to achieve this target within the
stipulated timeframe. In pursuit of these objectives, it is
Government of Pakistan imperative to implement the recent decision of the
implemented partially in two to Federal Shariat Court regarding the abolition of interest.
It is hoped that the above- mentioned measures will lead
three phases. This report was the to a fully interest-free economic system in Pakistan.
Council's first major effort toward ICMA: How well do Pakistan's banking and trade laws
align with Islamic principles, and what improvements
restructuring the national are needed?
economy on Islamic principles. Chairman CII: Significant reforms are required to align
Pakistan's banking and commercial laws with the
principles of the Qur'an and Sunnah.
6 ICMA’s Chartered Management Accountant, Mar-Apr 2025