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Body on financial system wants enhanced role

RECORDER REPORT

KARACHI: The Commission on Transformation of the Financial System has recommended to the government for enlarging both the membership of task forces and the scope of their terms of reference.

After the decision of the Sharia Appellate Bench of the Supreme Court about replacement of "Riba" from the economy, the government had set up a 11-member Commission on January 22, under the chairmanship of I.A. Hanfi in the State Bank of Pakistan.

In its first meeting on Thursday, the commission examined the terms of reference of the task force, constituted in the Finance Division to propose measures to convert the government domestic borrowings into project-related financing according to Shariah injunctions.

The commission also examined the terms and reference of the task force constituted in the Ministry of Law, Justice and Human Rights to propose new laws for the prohibition of Riba and review existing financial and other laws to bring them in conformity to the requirements of Islamic Financial system.

It recommended to the government for enlarging the membership of Task Forces and scope of their terms of reference.

It also constituted a few committees to examine and make recommendations in respect of specific areas of standard accounting and development of standard financial instruments, their documentation and procedures.

The commission has asked both the task forces and the committees constituted by it to inform the commission of their work programme and time-table of submission of their recommendations.

It will soon hold another meeting to review the programme and time-table and develop a work plan for the transformation of the financial system.

The Federal government has authorised it to carry out, control and supervise the process of transformation of the existing financial system to the one conforming Sharia.

The bankers and economist were facing problems to develop sufficient number of instruments to use it for the banking and trading perpose.

The Supreme Court held that all the legislation will cease to have effect from March 31, 2000, when other provisions of laws to the extent that those have been declared to be repugnant to Islam, will also cease to have effect from June 30, 2001.