Why did the earlier attempt to introduce Islamic banking into Pakistan not work out?
In 1986 the government decided to introduce Islamic banking and legislated it and gave the banks some time to convert. The banks converted, but nobody was ready and the whole process got derailed. In the mid-90s somebody challenged the government’s Islamic banking system with the Supreme Court, and the Supreme Court set up an appeal bench which heard the case. It decided that the Islamic banking being implemented by the government of Pakistan was not Islamic in many respects. It pointed out the areas that were not Islamic and mandated the government to change that in two years, and issued it a road map. The government felt that was not the way to go about it, so they challenged the Supreme Court’s decision and now the case is going to come up for re-hearing.
