PESHAWAR, July 2: The provincial assembly on Monday adopted a private member’s bill banning all interest-based private loan related transactions across the NWFP. The adoption of the NWFP Prohibition of Interest on Private Loans Bill, 2007, was described by its proponents as a step towards enforcement of Islamic laws in the province.
The bill was tabled by former deputy speaker Ikramullah Khan Shahid, a follower of the Jamiat Ulema-i-Islam (Samiul Haq group).
However, all financial institutions, including banks, financial corporations or cooperative societies, controlled by the federal and provincial governments would not come under the ambit of the new law.
According to section 3 of the bill, “No person shall be permitted to grant loans to an individual or a group of people on the basis of interest”.
“The violation of the law shall be non-bailable and non-compoundable offence and shall be liable to police action under Pakistan’s Penal Code’s section 4, sub-section (1) clause (f)”, section 4 of the bill stated.
The offences shall be punishable by up to 10 years imprisonment or fine of Rs500,000 or both.
The NWFP government shall make rules and regulations for the enforcement of the law.
The sections of the NWFP Money Lenders Ordinance, 1960, the law that dealt with such matters and were now in conflict with the present law, shall be repealed.
