Interest-free banking: some suggestions

The Pakistani government's numerous efforts to encourage interest-free banking, which can not develop immediately, need public support. No complete and viable model for such banking is available. The current interest-free methods of Musharaka and participatory-term certificates have their flaws. The current stage is an initial one -- changes will be made later. A positive outlook while making these efforts is crucial. Two policies may end the unjust competition between interest-free and interest-involved institutions: the presentation of a timetable for the end of interest-based practices; or tax breaks for interest-free operations. Shares and profit-and-loss accounts should be treated similarly in the event of losses -- the dip should be recorded but written off future profits. Management and outside shares should be distinct. A central fund overseen by the State Bank can help out banks taking losses. Bankers need intense training. A group of knowledgeable people should adv