The 26th Constitutional Amendment has set January 1, 2028, as the deadline for eliminating Riba (interest-based banking) practices in Pakistan.
Initiated by the Jamiat Ulema-e-Islam-Fazl (JUI-F) party, this amendment aims to enhance social and economic welfare by eradicating usury.
It revises clause (f) of Article 38 of the Constitution, moving from a vague commitment to “eliminate Riba as early as possible” to a clear target date.
This change aligns with a 2022 ruling from the Federal Shariat Court, which instructed the government to implement an Islamic, interest-free banking system within five years, stating that any Riba-related transactions are inherently wrong.
The court’s decision also emphasized the necessity for the government to ensure that all domestic and international loans are interest-free.
In response, the State Bank of Pakistan has started preparing to establish a digital retail Islamic bank and improve Sharia-compliant banking practices. The central bank’s strategic initiative, “SBP Vision 2028,” aims to transform the banking system to comply with Islamic principles, reinforcing its dedication to eliminating Riba from Pakistan’s financial landscape.
