Eassy on Role of Islamic Banking In Pakistan
The Objectives Resolution of 1949 which is now a substantive part as Article 2A of the constitution of the Islamic Republic of Pakistan envisaged that 'the Muslims shall be enabled to order their lives in the individual and collective spheres in accordance with the teaching and requirements of Islam as set out in the Holy Quran and the Sunnah'. As a consequence of this basic guideline the Article 38(f) of the constitution under Chapter 2 containing the Principles of Policy, provides that the State shall eliminate Riba as early as possible. Article 29 of the constitution also lays down that 'it is the responsibility of each organ and authority of the State, and of each person performing functions on behalf of an organ or authority of the State, to act iit accordance with those Principles in so far as they relate to the functions of the organ or authority'. Elimination of Riba had been a part of the Principles of Policy in the previous constitutions of the country.
On the basis of an official reference about Riba made in March 1963 by the Ministry of Finance, the Council of Islamic Ideology for the first time examined the issue in their meetings held in June and September
1963. The question received from the Ministry and examined by the Council was:
"Whether interest in the form in which it appears in public transactions is in conformity with principles and concepts of Islam?"
The following decision on the issue was taken by the Council in their meeting held on January 13, 1964 at Karachi.
"The Advisory Council of Islamic Ideology agrees that 'Riba' is forbidden but is in disagreement as to whether 'Interest in the form in which it appears in Public transactions which in the opinion of Council includes 'institutional credit' as well would also be covered by 'Riba' specified in the Holy Quran. There is, however, unanimity on the point that for the fulfilment of the Islamic requirement of social justice and...