KARACHI: As Pakistan is grappled with economic challenges, Finance Minister Ishaq Dar Thursday approved a proposal to raise an interest-free $ 2 billion from overseas Pakistanis to alleviate the ongoing foreign exchange crisis.

Also, the federal minister directed the State Bank of Pakistan (SBP) to initiate the process for the scheme offered by the Saylani Welfare International Trust (SWIT).

The proposal was presented by Moulana Basheer Farooqi, Chairman of SWIT at the National Islamic Economic Forum Conference-2023 (NIEFC) jointly organized by SWIT and Darul Uloom Memon at a hotel here.

The Finance Minister addressed the event as the chief guest via video link. He hoped that the proposal would be implemented in a transparent, well-regulated, and structured manner.

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Dar offered his assistance to act as a facilitator between the SBP and concerned charities that wanted to collect donations for serving the national economy.

“We want to make an appeal to the overseas Pakistanis that they should deposit dollars in the SBP for a minimum five-year period. This amount may be utilized to clear thousands of import containers, currently stuck at ports due to letter of credit (LC) issues. We will be able to raise at least $2 billion within a few days,” he added.

Farooqi said: “SWIT will partner with like-minded charities to approach concerned philanthropists within and outside the country for raising at least US $ 2 billion for the State Bank of Pakistan to facilitate importers who have been facing serious hardships due to fast depleting foreign exchange reserves.”

He told the audience that he had planned to team up with top charities in Pakistan including Akhuwat, Citizens Foundation and Indus Hospital to raise funds from concerned donors in Pakistan to facilitate traders.

He recalled that Pakistan came into existence in 1947 in the name of Islam as its banking and financial system should fully conform to Islamic principles.

Adoption of an interest-free banking system would be highly beneficial to achieve this cause.

The minister has assured the fullest support of the present government in efforts to make the banking system of Pakistan interest-free and transform it according to Islamic principles in five years’ time as per the deadline for the purpose given by the Federal Shariat Court.

Dar told an audience at the conference that the cause of implementing Islamic principles in the banking sector was very close to his heart as he sincerely wished that banking systems became interest-free in Pakistan. “As a sincere follower of the teachings of Islam it is my earnest desire to get rid of the interest-based financial system in our country,” said the Finance Minister.

He said that brainstorming sessions like NIEFC with participation by leading financial experts and Islamic scholars went a long way in facilitating the government to achieve the cause of reforming the banking system as per the guiding principles of Islam.

He said that with the involvement of every concerned stakeholder including noted religious scholars, financial, and economic experts Pakistan would easily fulfill the task of making the banking system interest-free and Shariah-compliant within five years.

He said that in his previous tenure as the Finance minister he had introduced a number of initiatives to speed up the process of adoption of Islamic principles by the banking system.

The Finance Minister said that in the past term, he had offered two per cent tax exemption to the listed manufacturing companies that duly adopted the Islamic banking system. He said that as soon as he had assumed the Finance Ministry he implemented his thinking by advising the State Bank of Pakistan and the National Bank of Pakistan to withdraw their appeals against the judgment of the Shariat Court to eliminate interest from the banking system.

Dar said that a steering committee had been formed with all the relevant stakeholders and he being its patron to work on the cause of transforming the banking system as per the Shariah principles.

He said the donations collected by his charitable drive would go a long way to generate employment opportunities for the masses in the country.

He recalled that Pakistan had come into existence in 1947 in the name of Islam as its banking and financial system should fully conform to Islamic principles.

He said that the adoption of an interest-free banking system would be highly beneficial to achieve this cause.

Noted religious scholar Mufti Muneeb-ur-Rehman, said that apart from getting rid of the interest-based banking system the tax mechanism should also be reformed to end the exploitation of the poor people and labourers.

He said that a 17 percent general sales tax paid on items of everyday use was highly exploitative for the consumers belonging to low-income groups, as this tax rate should be reduced to seven percent to end this economic exploitation.

He said that a maximum number of people belonging to the affluent classes should be included in the tax net to increase the revenue income of the country.

He appealed to the wealthy people to come forward and donate generously to lessen the miseries of their fellow countrymen belonging to the downtrodden communities.

Ashfaq Tola, State Minister for Reforms and Resource Mobilization Commission, said the present government was fully serious to wage Jihad against the interest-based financial and banking system in the country to end the exploitation of the countrymen.

State Bank of Pakistan Executive Director Syed Samar Hasnain held out the firm assurance on behalf of the SBP to implement an interest-free banking system in Pakistan as per the directives of the Shariat Court. He said that Pakistan required a large number of trained banking professionals to make all banks Shariah-compliant.

He told the audience that Pakistan had six fully Islamic banks while 16 banks had Islamic banking branches functioning in 130 districts

He assured the audience that the steering committee formed by the government would make quick progress to implement Shariah-compliant banking system in the country.

Copyright Business Recorder, 2023