Tuesday July 16, 2024

Private money lending on interest a prohibited business in Islamabad now

By Muhammad Anis
December 22, 2022

Islamabad: Thanks to legislation in the Parliament, the federal capital will be purged of private interest-based money-lending businesses in the days to come.

The joint session of the Parliament passed the Islamabad Capital Territory Prohibition of Interest on Private Loans Bill, 2019. The bill will become an Act of Parliament once it is signed by President Arif Alvi.

The new law which will prohibit interest on private loans will be extended to the Islamabad Capital Territory and will come into force forthwith. The bill was originally moved by then-Senator Sirajul Haq, the central ameer of Jamaat-e-Islami (JI) in the Senate in 2019 but later it could not see the light of day in the National Assembly.

Consequently, the bill was referred to the joint sitting of the Parliament which passed it with consensus on Tuesday evening. The JI MNA Maulana Abdul Akbar Chitrali moved the bill in the House.

The JI parliamentarian said that due to private money transactions, the borrower or debtor is molested by money lenders to pay the principal amount and interest on it. “Debtors are continually harassed by money lenders for recovery of the principal amount along with multiplied interest,” he said.

The bill says that no money lender either individually or in a group of persons shall lend money or advance loans to any person for purpose of receiving loans nor shall carry on interest-based transactions in the Islamabad Capital Territory. The violation of the law will be punishable with imprisonment which may extend to 10 years and not less than three years along with a fine not exceeding Rs1 million. The law also says that if anybody molests a borrower or debtor and forces him to pay back the loan or interest, will face imprisonment for up to five years and shall also be liable to pay a fine of up to Rs0.5 million. The law further says that if a person intentionally or wilfully abets or assists a person in the recovery of interest on a loan, shall also face imprisonment for up to 10 years and a fine not exceeding Rs1 million. A court of justice on receiving a complaint shall order the Police to register FIR against the accused within three days and no court inferior to the Judicial Magistrate of the first class shall hold the trial of the case. Once the law comes into force, every obligation of any borrower or debtor to pay interest on money lending will stand extinguished. The statement of objects of the bill says that the Holy Quran and Sunnah categorically prohibit receiving interest on loans and declare war against all those indulging in such activity.