The 26th Constitutional Amendment has established January 1, 2028, as the deadline for ending Riba (interest-based banking) practices in the country.
This amendment, prompted by the Jamiat Ulema-e-Islam-Fazl (JUI-F) party, seeks to promote social and economic welfare by eliminating usury.
The amendment modifies clause (f) of Article 38 of the Constitution, shifting from a vague commitment to “eliminate Riba as early as possible” to a specific target date.
This change aligns with a 2022 ruling from the Federal Shariat Court, which mandated the government to implement an Islamic, interest-free banking system within five years, emphasizing that any transaction involving Riba is fundamentally wrong.
The court’s verdict also highlighted the need for the government to ensure that both domestic and international loans are interest-free.
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In response, the State Bank of Pakistan has begun preparations for establishing a digital retail Islamic bank and enhancing Sharia-compliant banking practices.
The central bank’s strategic plan, “SBP Vision 2028,” aims to transform the banking system into one that adheres to Islamic principles, reinforcing its commitment to abolishing Riba from the financial landscape of Pakistan.
