The Senate has recently approved the 26th Constitutional Amendment Bill, 2024, which establishes January 1, 2028, as the target date for phasing out Riba, or interest-based banking, in Pakistan. This important change was suggested by the Jamiat Ulema-e-Islam-Fazl (JUI-F), a political party led by Maulana Fazl-ur-Rehman. Their proposal added challenges for the government during the discussion of the amendment.
The Senate made changes to clause (f) of Article 38 of the Constitution, which is focused on promoting the social and economic welfare of citizens. The original wording stated the goal was to “eliminate Riba as early as possible.” However, this has now been changed to say that the goal is to do so “as far as practicable, by the 1st of January, 2028.”
This amendment represents a significant step in the government’s efforts to transition to an interest-free banking system that aligns with Islamic principles. The move is expected to help create a more equitable financial system in Pakistan, offering a fairer approach to banking and finance.
Implementing this change will require the government to develop various reforms and policies to ensure a smooth transition. Many citizens view this amendment as a positive shift towards an economic system that upholds their values. However, challenges lie ahead in effectively managing this transition and ensuring that the interests of all stakeholders are considered during the process.
