Four commercial banks—United Bank Limited, Allied Bank Limited, MCB Bank, and National Bank of Pakistan—along with the banking regulator filed a review on the Riba Case at the Supreme Court of Pakistan in an anticipated move (SC).
In its appeal, the banking regulator told the court that since a number of financial issues had previously been decided based on national interest, it was in need of clarification from the top court over a few inconsistencies in the prior ruling.
The appeal also asked the Supreme Court to provide clarification on the conversion of the Defense Certificate at a set profit rate, which resulted in a significant increase in the amount of public debt.
The petition further claims that it is now not feasible to issue Sukuk or other comparable instruments on a regular basis in the requisite quantity. Also restricted are the resources that can be used to structure Sukuk instruments.
The petitioner asked the Pakistani Supreme Court for advice about the Federal Shariat Court’s ruling regarding savings bonds and domestically issued public debt in general.
Owners of interest-bearing securities issued outside of Pakistan frequently engage in international commerce and finance as individuals and corporations. The process for receiving such interest inside Pakistan is provided under Rule 9 (2).
Any instrument with an interest component cannot be issued in Pakistan under the same law. The petition states that an appropriate ruling and the Supreme Court’s indulgence are required due to Rule 9’s illegality.
To read our blog on “Shariat Court has ordered to abolish Riba-based Haram financial system,” click here.