The Federal Shariah Court of Pakistan FSC has issued a court order for the government to eliminate interest from domestic or foreign borrowings by 2027. Riba, as it is known within Islam, is most closely translated in English as 'usury', and is prohibited by the faith. But previous attempts at creating an interest-free economy have failed to materialise, or at least they have had spillover repercussions for the country’s banking sector, according to Fitch Ratings.
FinanceAsia sat down with the rating agency’s global head of Islamic finance, Bashar Al Natoor, and associate director, Saif Shawqi, to discuss what the latest move might mean for Pakistan’s Islamic finance industry.
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