Islamization of Pakistan's economy

The Pakistani government's Islamization of the economy intends to eliminate all financial practices forbidden by Islam, especially Riba (interest). Principally, the government has shifted interest-bearing financial transactions into a profit and loss sharing system (PLS), based on equity participation. Other new instruments include the Participation Term Certificate, the Mudarabah, the Musharaka, and interest-free loans and credits. A Mudarabah is an investment fund financed through the sale of Mudarabah certificates. A Musharaka is a temporary partnership in which commercial banks and sponsors share in profit or loss generated through the working capital of the sponsors. Many important Pakistani institutions have shifted activities toward non-interest bearing operations. Commercial banks have begun to advance Qard Hasan (interest-free loans) to finance the education of deserving students. Efforts are also being made to collect and distribute Zakah and Ushr.