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Pakistan

Govt announces end to riba in five years

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ISLAMABAD:

 

The government announced on Wednesday it would implement the Federal Shariat Court (FSC) decision, implying that it would transform the existing interest-based banking system to an interest-free model in the next five years.

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Finance Minister Ishaq Dar said in a pre-recorded statement that the State Bank of Pakistan (SBP) and the National Bank of Pakistan (NBP) were withdrawing their appeals against the FSC, inferring that the government would implement the interest-free banking system by December 2027.

On the day Dar announced to honour the FSC decision, Finance Secretary Hamed Yaqoob Sheikh launched a new SDG and Climate Finance Facility to tap foreign loans from non-traditional international investors.

The finance ministry and the United Nations Development Programme (UNDP), Pakistan, launched the Climate Financing Facility to mobilise private sector investments after the traditional financing by the foreign creditors started drying up.

On the same day, Dar also announced that the Asian Infrastructure Investment Bank (AIIB) approved $500 million loan. Pakistan has secured the loan at one of the highest interest rate of 4.9% by any multilateral creditor.

The three separate but identical events highlight the challenges facing Pakistan’s economy due to mounting requirements that makes the government deeply dependent on domestic and foreign creditors to remain afloat.

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In its April 2022 judgment, the FSC had also directed that future financial engagements, including the availing of loans and advances, between Pakistan and international financial institutions and other bilateral as well as multilateral providers of finance be carried out on the basis of Shariah compliant modes of finance such as the issue of Sukuk.

Dar said that Pakistan did not move forward towards an interest-free banking system during the past few years as it should have. He added that the decision to withdraw the appeals was taken after permission from Prime Minister Shehbaz Sharif and in consultation with the SBP governor.

In June this year, the central bank had approached the Supreme Court, seeking modification in the FSC’s April 28 judgment that declared that riba was prohibited, according to the injunctions of Islam, so it should be eliminated from the country in five years.

At present the Islamic banks account for 19.4% of the country’s overall banking system in terms of assets, while in terms of deposits the share is 20%. Currently, 22 Islamic banking institutions are running five full-fledged Islamic banks and 17 conventional banks having standalone Islamic banking branches with a network of 3,983 branches along with 1,418 Islamic banking windows.

In its appeal, the SBP argued that a mass-scale conversion of the banking system would require infrastructural investment and changes at a mega scale – at least five times more within the next five years in comparison with the current level which had been achieved in more than 20 years.

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The government’s decision to withdraw the appeals would now require shifting of the traditional banking to Islamic banking. But Dar did not give a framework how he intended to implement the decision.

As a result of the FSC decision, Pakistan became the first Muslim country to officially declare modern bank interest as riba, declared haram by Qur’an. The FSC had declared the laws allowing interest repugnant to Islam in 1991.
The federal government and certain banks and financial institutions filed 67 appeals against this judgment in the Shariah Appellate Bench of the Supreme Court.

The FSC has declared a number of laws of the country repugnant to the injunctions of Islam, as they have provided for charging or paying interest, which according to the findings of the FSC, fall within the definition of riba.

Dar said that the government would try to implement the Islamic banking system as soon as possible. “God willing, we will take Pakistan towards an interest-free economy”, he added.

Traditional borrowing continues

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Dar took to twitter on Wednesday to announce that the AIIB Board had approved a $500 million loan for Pakistan. The loan has been contracted at the Secured Overnight Financing Rate (SOFR), which currently stands at 3.8%.

Pakistan will pay 0.81% over and above the SOFR on account of a fixed spread and variable borrowing cost, taking the tally to 4.61%. Then there is a front-end fee of 0.25%, which is $1.25 million on a loan of $500 million. This brings the total interest rate to 4.9% – one of the highest by a multilateral institution.

Meanwhile, the finance secretary launched a new financing facility aimed at taking a pie out of available climate change financing window in the world.

“This is a timely initiative for accelerating financing for development in Pakistan”, said Hamed Yaqoob Sheikh, while launching the facility. “We must call on the private sector and international stakeholders to expand the financing pool and reach out to marginalised populations”, he added.

UNDP Senior Adviser on Financing for Development, Haroon Sharif, said that the traditional financing sources were coming under pressure but huge sums of money were available for climate resilience initiatives that could be mobilised by pitching projects for investors.

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Sharif said that under the new initiative, they were targeting $2 to 3 billion financing in the next two to three years out of the potential investment of $96 billion that Pakistan could tap.

The IMF estimates Pakistan’s annual financing gap for the SDGs at $3.72 billion for 2022-23. Pakistan can also arrange $500 million through green sovereign bond, as it may not be able to raise planned $2 billion through traditional eurobonds due to its junk credit rating.

Initially, the government and the UNDP have identified three projects worth $112 million for financing under the SDG Investment and Climate Financing Facility.





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Pakistan

Imran’s right of defence struck out in defamation case

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ISLAMABAD:

Additional District Judge Lahore Chaudhry Muhammad Asif struck out the right of defence of former prime minister since concerned interrogatories of the plaintiff were not submitted on Thursday.

“This court has been left with no option except to strike out the right of defence of the defendant (Imran Khan) in this case due to non-submission of requisite replies by the defendant regarding concerned interrogatories of the plaintiff. So, the right of defence of the defendant is hereby struck out in this case accordingly,” the order stated.

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The court asked the plaintiff to submit a list of witnesses on November 29.

It has been learned that the court has so far conducted 78 hearings of the case.

The order stated that the counsel for the defendant submitted an application for adjournment on the ground that the defendant was going to file a revised petition against the order of the court regarding the dismissal of concerned objections of the defendant.

Also read: ‘No objections’ to Imran’s helicopter landing at Parade Ground: GHQ

“From the perusal of record, it reveals that various reasonable opportunities have been provided to defendant to submit the requisite replies to concerned interrogatories of the plaintiff but the defendant has not done the needful,” it stated.

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“Vide previous order dated 17.11.2022, one more opportunity was granted to the defendant in this regard with the clarification that in case of submission of requisite replies from the defendant’s side regarding concerned interrogatories of the plaintiff on the next date, the right of defence of the defendant shall be struck out. No lawful justification exits for the grant of further adjournment,” it added.

The court rejected the adjournment plea of Imran’s counsel.

According to details, the defamation suit states that Imran started uttering false and malicious statements against the plaintiff (Shehbaz) that the latter offered Rs10 billion to the former through a common friend in exchange of withdrawing the case of Panama Papers pending before the Supreme Court (SC).

Also read: President Alvi in Lahore to consult Imran over COAS appointment

​​​It pleads that the baseless and defamatory statements by the defendant widely circulated by media lowered the integrity of the plaintiff and caused him extreme mental torture, agony and anxiety. The court has been requested to issue a decree for recovery of Rs 10 billion as compensation for the publication of defamatory content in favour of the plaintiff.

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In his written statement, the Pakistan Tehreek-e-Insaf (PTI) chief states that one of his friends told him that someone known to him and also the Sharif family approached him with an offer to pay billions of rupees if he could convince him to stop pursuing the Panama Papers case.

Imran says that he disclosed the incident for the consumption of the public at large and in the interest of the public good does not constitute any defamation.





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Pakistan

Pakistan to send armed helicopter unit to UN peacekeeping mission

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UNITED NATIONS:

Pakistan and Bangladesh will each be sending an armed helicopter unit to the UN peacekeeping operations in Mali, which faces serious problems as several countries have withdrawn or announced plans to pull out their personnel, a UN spokesperson said on Wednesday.

Spokesman Farhan Haq said that India will supply a utility helicopter unit to the Multidimensional Integrated Stabilization Mission in Mali, known as MINUSMA, and all three are expected to be deployed by March next year.

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“These provide much-needed support to our forces and are critical for early warning and rapid response to protect civilians,” the spokesman told reporters at the regular noon briefing at the UN headquarters in New York.

“The UN continues to discuss with member states the deployment of new assets and plans to fill longer-standing gaps in addition to those resulting from recent announcements” of withdrawals, he said.

Set up in 2013, MINUSMA has 17,622 personnel helping the Malian government combat terrorists operating in the country.

MINUSMA is one of the deadliest operations having claimed the lives of 292 peacekeepers.

France completed its withdrawal earlier this year and it was followed by Egypt in August.

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Germany said that it was withdrawing its personnel, who numbered 595 in the latest UN roster, from MINUSMA by May next year.

Also read: Who is country’s new army chief Asim Munir?

Britain is also pulling out its 249 personnel.

Ivory Coast also said that it would discontinue the participation of its personnel, who numbered 898, in MINUSMA when the current deployment ends because of a separate dispute with the Mali government over the arrest of its soldiers who went there on a mission unconnected to the UN.

Despite the dangerous nature of the Minusma, Pakistani military doctors serving in Mopti, a town in the fifth administrative region of Mali. have continued to serve, earning praise for their work. They operate a state-of-the-art hospital staffed with 75 medical personnel, including 10 women and 65 men, according to the UN.

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The hospital operates 24 hours a day, every day, and they are always on alert. All specialities are covered, from pharmacy to gynaecology. However, its main purpose is to perform life-saving and urgent surgery when peacekeepers are injured, it was pointed out.





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Pakistan

Imran urges ‘all Pakistanis to participate’ in PTI long march

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Former prime minister and PTI Chairman Imran Khan on Thursday urged all Pakistanis to participate in his party’s much-hyped long march on Saturday (Nov26) in what appears to be his final showdown with the incumbent government to force it to announce early election date.

“Dear Pakistanis, I want all of you to participate in our haqeeqi long march in Pindi at 1pm on Saturday,” he said in a short video statement.

Imran, who was removed from power through a vote of no confidence in April, said that only a nation which has justice in it will get real freedom. “When there is justice, there are rights. When there are rights, a nation is free. Only an independent nation is prosperous,” he went on to say.

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Read more: Interior ministry warns PTI of threats, urges postponing Pindi march

The former premier said that the nation will not stay silent until it gets real freedom. “I am coming for you despite my [health] condition and all of you need to come to Pindi for me,” he concluded.

Meanwhile, senior PTI leader Asad Umar presided over a meeting regarding the party’s preparation for the long march in Rawalpindi. Senior PTI leadership including Umar Ayub, Shibli Faraz, Ali Nawaz and others participated in the meeting.

The meeting discussed the overall preparations for the long march in Rawalpindi. The security plan, long march route and other significant matters came under discussion during the meeting.

The meeting was briefed that a caravan had left from Karachi for Rawalpindi whereas two others were ready to begin their journey to the garrison city from Quetta and Gilgit-Baltistan.

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A briefing was also given in the meeting regarding the accommodation of the participants.

Issues regarding the provision of all basic needs including food and accommodation to the participants of the march were also discussed in the meeting.

“The nation is fully united and eager to achieve real freedom,” Umar said, adding that the party would welcome caravans from all over Pakistan in Rawalpindi.

“The captain [Imran Khan] will lead the ocean of people in Rawalpindi on November 26,” he further said.





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