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KARACHI: The financial sector is capable of providing Riba-free services to all segments of society and a national strategy and political will is required to implement the Federal Shariat Court’s (FSC) judgement on the matter, said speakers during a conference titled “Implementing the FSC Judgement on Riba: Addressing the how”.

The conference was jointly organised by the Institute of Policy Studies (IPS), Institute of Business Administration’s Centre for Excellence in Islamic Finance (IBA-CEIF), and Centre of Islamic Economics — a division of the Jamia Darul Uloom, Karachi — at the IBA City Campus.

The conference was addressed by Ahmed Ali Siddiqui, the director of IBA-CEIF, Omar Mustafa Ansari, the secretary general of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), Mufti Irshad Ahmad Aijaz, the chairman of Shariah Advisory Committee, State Bank of Pakistan and Securities and Exchange Commission of Pakistan; Farrukh Raza, the CEO of Islamic Finance Advisory and Assurance Services (IFAAS) Group; Dr Imran Usmani, vice chairman of the Shariah Supervisory Board, Meezan Bank; and Khalid Rahman, the chairman of IPS.

The speakers said that it is the religious and constitutional duty of all the stakeholders to help formulate a roadmap for conversion of the existing financial system of the country to a Riba-free one, in line with the injunctions of Islam, and implement the same accordingly.

Therefore, all sectors of the government dealing with borrowing, external debts, the banking sector, the non-banking sector, the capital market as well as the legal and regulatory frameworks need to bring about changes at the strategic and operational levels, they added.

The experts were of the opinion that all the financial and related sectors already have the capacity to convert the existing non-Islamic procedures into Islamic standards by reinforcing appropriate ways and means to implement the FSC’s judgement.

The speakers also emphasised that the federal government should devise a conversion policy with yearly targets and proper monitoring of all the sectors. This national-level strategy must be developed with the consensus and inclusion of all the stakeholders to ensure coordination and commitment to Shariah-compliant guidelines.

The government should also create an enabling environment by consulting all the related organisations, introducing educational reforms, and taking capacity-building measures for officials. Along with the national-level strategy and policy, sector-wise planning is also needed.

Fintech, combined with tools of Islamic social finance, can provide solutions to challenges of financial inclusion through increased access to credit, financial safety nets, consumer protection, crowdfunding models, and microfinance and entrepreneurship development. The tools like the qard-e-hasana model, micro-takaful, waqf, zakat, and sadaqat can also ensure economic justice within the system.

The speakers laid out aspects foundational to bringing about the required changes in the system: a vision that is shared and supported by all the stakeholders and trusted by the people. Also required are political willingness and a sense of ownership; defined targets and processes coupled with an action plan and resources; legislation and comprehensive regulatory supervision and its implementation; good governance; capacity building; and system’s development through technology and infrastructure building.

Just as a lack of awareness and trust among people with regard to change weakens advocacy for the cause, therefore, maintaining communications at all levels to create awareness and consciousness among people is equally important for achieving the goals of a Riba-free economy, said the experts.

Copyright Business Recorder, 2023

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