Interest-free Pakistan

Following Pakistan's 1985 ban on the giving and taking of interest, foreign banks in Pakistan changed their behavior and are now mandated to declare profits every six months and share those profits with depositors instead of giving them pre-determined interest payments. The State Bank has issued a list of acceptable financial practices. Among these are musharaka partnerships and mudaraba (trust financing venture) contracts. One foreign banker is quoted as saying that the switch to no interest has led simply to more forms to fill and the official expunging of the term 'interest'. Foreign banks are typically highly reluctant to enter into profit-and-loss-sharing ventures; a Grindlay's said that partnerships are only offered to tried and tested clients. At this point, the Pakistani government continues to hold interest-bearing deposits. Although conventional banks exist alongside Islamic ones, some Muslims are highly critical of this juxtaposition.