ISLAMABAD (November 07 2002) : The final report submitted by the Task Force on legal matters to eliminate Riba (interest) from economy drafted six ordinances and one amendment in HBFC Act.
The ordinances include draft Ordinance to repeal the Interest Act 1839, draft Ordinance to further amend the Banking Companies Ordinance, draft Ordinance to bring the laws relating to the Money Lenders in conformity with the injunctions of Islam, draft Prohibition of Riba Ordinance, draft Financial Transaction Ordinance, Riba Oriented Repeal and Amendment Ordinance 2002. An amendment has also been proposed in the HBFC Act.
Necessary amendments have been made in the HBFC Act, and further amendments are required to be introduced after promulgation of the Riba Ordinance. In case of banks, it was felt that unless the banks were restructured as holding companies, it might not be easy for them to successfully and smoothly practise Islamic mode and adopt Musharakah, Mudarabah and Ijarah etc as alternatives to interest.
The matter was considered threadbare both independently as well as in joint meetings of the members of the task Force and the Commission on Transformation of the Financial System. Efforts were made to develop common perception and understanding in chalking out consensus road map to meet targets.
The Task Force has reviewed Government Savings Bank Act 1873, Land Acquisition Act 1894, Code of Civil Procedures 1908, The Co-operative Societies Act, 1925, Agriculture Development Bank Rules 1961, Negotiable Instrument Act 1881, HBFC Act 1952, Interest Act 1893 and Banking Companies Ordinance, Co-operative Societies Act 1925 and Co-operative Societies Rules 1927.
Following laws were repugnant to the injunctions of Islam and had ceased to have effect during March 2000; The Interest Act 1839, The West Pakistan Money Lenders Ordinance 1960, The West Pakistan Money Lenders Rules 1965, The Punjab Money Lenders Ordinance 1960, The Sindh Money Lenders Ordinance 1960, The NWFP Money Lenders Ordinance 1960, The Balochistan Money Lenders Ordinance 1960 and Section 9 of the Banking Companies Ordinance.