Khadim Hussain Siddiqui’ version before Federal Shariat Court of Pakistan in 1992
S J Tubrazy
Mr. Khadim Hussain Siddiqui of Karachi, a highly experienced banker, who has been President of the Allied Bank Limited. He was also member of the Panel of Experts formed by the Council of Islamic Ideology, in 1978 for eradication of interest from the country’s economy. He categorically stated that bank interest comes within the definition of Riba and is banned in Islam in whatever form or for whatever purpose it may be. There is no difference between the consumption loans and productive loans so far as the prohibition of interest in Islam is concerned. He suggested that Merchant Banking is the alternate for the interest-free banking system. He further submitted that Musharakah and Mudarabah are workable systems for interest-free banking. He was of the firm view that the Interest should be abolished in one-go, not only from the Banks and other financial institutions but the Government also. No difference should be made between private Banking and the Government Banking. Partial or half-hearted measures for abolition of interest will prove abortive as is evident from the experience of the history of past ten years. He suggested that the Banks have to act as future `Holding Companies’ and for that purpose structural changes will have to be made in the present banking system.