Shariah-compliant banking framework: Speakers call for timely implementation

KARACHI: Speakers at the 4th National Islamic Economic Forum Conference 2026 on Wednesday emphasised the need for timely implementation of the transition to a fully Shariah-compliant banking framework in the country and urged the government and the State Bank of Pakistan (SBP) to fulfill their commitment to establishing a Riba-free financial system by January 1, 2028.

The Conference, organised by Saylani Welfare International Trust, also unanimously adopted a resolution calling for all commercial banks to be fully converted to Shariah-compliant banking by December 31, 2027, without granting any exemptions. The resolution emphasised that Pakistan’s laws are binding on all domestic and foreign banks operating in the country and must be implemented in full.

Addressing the conference, Bilal Bin Saqib Chairman of the Pakistan Virtual Assets Regulatory Authority, said that the internet has transformed the world’s economy and now, transactions worth billions of dollars are being carried out through AI agents.

“Blockchain and artificial intelligence (AI) are not just new technologies, but are redefining human productivity,” he added. He said it is important to understand that whenever artificial intelligence needs to create or exchange value, it will not physically visit a bank to open an account or write a cheque.

He added that AI must also be taught values, which Islam introduced 1,400 years ago through the example of the Holy Prophet Muhammad (peace be upon him), known as Al-Sadiq and Al-Amin (the Truthful and the Trustworthy).

He said the global economy runs on truth and trust, and where trust does not exist, business cannot flourish. Strong trust enables societies to prosper, and technology should ultimately serve that purpose, he added.

Saqib urged people not to view blockchain solely through the lens of cryptocurrency. He described it as a technology built on transparency, truth and trust, one that protects ownership, ensures transparent record-keeping and helps prevent fraud. “Blockchain is not just a technology, it is the digital embodiment of trust,” he said.

He said that transparency would significantly improve, if all charitable donations and Zakat payments in Pakistan were digitised. Blockchain-based digital asset records can be verified by anyone from anywhere in the world, making financial transactions more secure and accountable.

He said many countries have already embarked on this journey, while Pakistan possesses a tremendous asset in the form of its youth, with around 60 percent of the population being young.

Praising Saylani Welfare, he said the Saylani is doing remarkable work by providing IT training to young people.

Addressing the conference, Mufti Muneeb-ur-Rehman said that Pakistan’s economy continues to rely heavily on borrowing and argued that issuing Sukuk alone would not provide a sustainable solution.

He noted that the Federal Shariat Court had identified around 40 laws requiring amendments to facilitate the transition to Islamic banking, but implementation had remained slow. He urged the government to convene industrialists and strengthen export financing schemes to generate employment and boost exports.

Founder of Saylani Welfare International Trust Maulana Bashir Farooq said it was announced in 2022 that Pakistan’s banking system would become fully Islamic by 2027, but progress has not matched expectations.

He said only a limited number of banks have fully adopted Islamic banking, while many others continue to operate under the conventional system.

As per SBP data, he said Islamic banking assets in Pakistan have reached approximately Rs14 trillion, demonstrating the sector’s rapid growth.

He offered Saylani’s support in providing Islamic banking literacy and training to employees of banks that are yet to complete the transition and urged the SBP to play a more proactive role in ensuring all banks adopt a Riba-free banking system.

Meezan Bank Group Head of Consumer Banking Ahmed Ali Siddiqui urged Islamic banks to prioritise financing productive sectors of the economy. He informed that Islamic banking is growing and now accounts for nearly 40 percent of the country’s banking industry and stressed that the ultimate objective should be the complete implementation of an Islamic financial system.

He said that eliminating interest (Riba) from Pakistan’s financial system is a religious obligation. He said the vision of an interest-free banking system is gradually becoming a reality, adding that the SBP and the Securities and Exchange Commission of Pakistan (SECP) have played a positive role in promoting Islamic banking.

Hamza Tabani, Chief Executive Officer of Tabani Group of Companies, said Saylani Welfare’s contributions to society are evident through its extensive welfare and IT training initiatives for young people.

Copyright Business Recorder, 2026