ISLAMABAD, Oct 10: The federal cabinet here on Wednesday approved amendments to the House Building Finance Corporation Act, 1952, to bring its provisions in line with a decision of the Shariat appellate bench of the Supreme Court and render its functions interest-free.

According to the proposed amendments, the corporation will not borrow on interest basis (which in the first place is not practised for rupee transactions in the banking sector since 1984).

The HBFC will work on profit-and-loss sharing and will pay to the federal government a share of its profits, as opposed to any fixed return.

Also, partnership with the house owners will be on the diminishing Musharakah basis, with corporation’s share decreased on the payment of each unit purchased.

Transactions prior to 1979 will become due and payable within three months (a one-off affair) and will require settlement. Departure from the required form of diminishing partnership in the cases of financing after 1979 will be corrected on the basis of profit and loss sharing.

The cabinet also approved a proposal for conclusion of agreement on merchant shipping between the government of Pakistan and the government of Cyprus. The agreement aims at promoting cooperation in the field of maritime transport and development of bilateral trade, cooperation in the employment, improvement of working conditions and the welfare of their seamen employed on each other’s vessels.

The cabinet further approved ratification of an agreement on cooperation between Associated Press of Pakistan and the Syrian Arab news agency. The agreement provides for exchange of news free of charge on regular basis through e-mail.