Religious Leaders Allege SBP Shielded Banks From Interest-Free Deadline

A group of prominent religious leaders has accused the State Bank of Pakistan of granting banks what they describe as de facto immunity from the constitutional deadline to eliminate riba by 2027, intensifying a long running dispute over the pace and sincerity of Pakistan’s transition to an interest free financial system.

The allegations have injected fresh tension into an already sensitive debate that sits at the intersection of religion, law, and economic policy.

Over 60 religio-political leaders, including Mufti Taqi Usmani, Mufti Muneeb, and Maulana Fazl-ur-Rehman, are urging for the complete implementation of the constitutional promise to establish an interest-free financial system by the end of 2027.

They stress that providing immunity to banks contradicts the Constitution. claim that recent regulatory actions and communications by the central bank effectively allow conventional banks to continue operating beyond the deadline set by the Federal Shariat Court, which in 2022 ordered the government and financial institutions to remove interest based practices by the end of 2027. According to the religious leaders, the State Bank of Pakistan has created legal and operational cover for banks that undermines both the spirit and intent of the ruling.

State Bank of Pakistan has not publicly acknowledged granting any exemption, but the controversy has drawn attention to how Islamic banking reforms are being implemented in practice. Critics argue that regulatory frameworks and transitional arrangements appear designed to protect the existing banking system rather than enforce a decisive shift toward Shariah compliant finance. Pakistan has repeatedly positioned itself as committed to expanding Islamic banking, which already accounts for a growing share of deposits and financing.

Religious scholars involved in the dispute argue that delays risk eroding public trust and weakening constitutional authority. They contend that the court ruling leaves little room for discretionary interpretation and that continued reliance on conventional interest mechanisms contradicts the mandate to eliminate riba entirely. Some have warned that failure to comply could invite further legal challenges and public protests.