Pakistani Mufti Taqi Usmani Declares Profit From Bank Deposit Halal

Samira Yusuf

July 22, 2024

Islamic banking system in Pakistan is not “fully Islamic.” And taking any profits from bank deposits is Haram in Islam.

Renowned Pakistani scholar Mufti Taqi Usmani has recently declared that earning profits from deposits in banks is halal (permissible) under Islamic law.

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This announcement comes amid ongoing debates regarding the Shariah compliance of Islamic banking practices in Pakistan.

Traditionally, earning interest from bank deposits is considered haram (forbidden) in Islam, leading to outrage over this declaration.

Issues Surrounding Islamic Banking in Pakistan

Islamic banks in Pakistan have faced skepticism regarding their adherence to Shariah principles. Concerns have been raised about the rigor of Shariah compliance audits and the effectiveness of external oversight.

Some Islamic bankers and Shariah advisors have expressed doubts about the extent to which these banks truly follow Islamic guidelines. This issue is compounded by a lack of stringent external audits and a fully developed legal framework for Islamic banking in the country.

Many customers opt for Islamic banking due to their religious beliefs, trusting that the banks ensure Shariah compliance. However, the regulatory framework for Islamic banks is a copy of conventional banks, limiting their ability to fully implement Shariah-compliant practices.

Mufti Taqi Usmani’s Position and Public Reaction

Despite these challenges, Mufti Taqi Usmani supports the Islamic banking system, even in the absence of stringent cross-checks of the compliance process. This support is visible on the websites of some Islamic banks, such as Meezan Bank, which prominently features Usmani as their advising scholar.

The press conference where Mufti Usmani made these declarations was highly publicized and criticized on social media, with accusations of bank sponsorship amid declining deposits in Pakistani banks, especially Islamic ones.

Political Statements and Criticism

During the press conference, Mufti Usmani also expressed support for Palestine and criticized the United States for backing Israel. He warned that if Israel succeeded, it might extend its territory up to Madinah.

Additionally, he criticized Middle Eastern countries, including Saudi Arabia and the UAE, for not playing a more active role in mediating the Gaza-Israel conflict. Usmani also condemned the Pakistani government for not doing enough in this regard.