Islamic banking — need of the hour

As a global concept, Islamic banking has established itself on a sound and solid footing. Almost every country with a substantial financial base offers Islamic banking operations parallel to conventional financing. However, the situation in Pakistan is rather complex. Pakistan’s constitutional structure makes it compulsory for the state to shift from conventional banking to Islamic banking after the unanimous decision of the Federal Shariat Court on April 28, 2022. Here, it is important to have a brief on the constitutionality of Islamic financing in Pakistan. First, we need to acknowledge that the Objectives Resolution making Islam the very basis of the Constitution of the Islamic Republic of Pakistan is now a substantive part of the Constitution by virtue of Article 2A of the Constitution. Moreover, Article 38(f) obligates the state to eliminate Riba as early as possible.