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June 11, 2006

Governor State Bank of Pakistan

Dear Governor,


Is a citizen’s  Faith and  Fiqah any concern of a Bank ?


Thank you for the brief meeting and the short discussion we had  at the Sindh Club Lunch on 11th June 2006.  Thank you for assuring me that you  will look into the subject of why Pakistan is the only country in the world, where banks  make compulsory  fiscal deductions on the name of religion.


As a  citizen of Pakistan I draw your kind attention to  this  serious violation of  our rights and freedoms.   We are  required to declare our faith and fiqah by banks in Pakistan, in order to seek exemption from the compulsory deduction of  Zakat from our bank accounts and securities.


The  Supreme Court in its historic judgment of March 9, 1999 has already recognised the right of a Muslim not to have Zakat deducted through banks. This however is only allowed when a citizen signs a judicial affidavit (CZ-50), which requires him/her to state that he/she is a Muslim belonging to a recognised Fiqah.  This gives birth to two very fundamental issues which are of utmost importance to individuals as well as society.


  1. If a Muslim already has the right to be exempted from Zakat deduction, why does he/she need to sign an affidavit and declare  his/her faith and fiqah. It is not merely a cumbersome procedure, but also a violation of a citizen’s right to not declare his/her faith or fiqah for financial purposes. The freedom of speech equally implies the freedom of not to speak. The affidavit of such a declaration is an intervention into a private belief system of an individual and also an unnecessary disclosure of  a private relationship between an individual and his God. Citizens should not be required by the state to constantly carry evidence of their religion (or sect) on their sleeves, nor should they be required to provide judicial affidavits of their faith and fiqah (or the absence of it) in matters of routine transactions.


  1. An important consequence of this faith and fiqah declaration is that it  highlights, identifies and divides  citizens of Pakistan into sects and creeds. It lays emphasis on what is different instead of what is common amongst us. It helps promote sectarianism, hatred and divisions in our society. You are aware of  the extent to which this factor has brutalised our daily lives. There is hardly a day when the newspapers do not report of followers of one sect killing the followers of another. The state’s policy of requiring every  account-holding citizen to stand up and be counted as belonging to this or that fiqah provides reinforcement  to this already widening sectarian divide.


Each time a bank is approached on this issue, one  receives the same old bureaucratic and sterile answer that it is a requirement of law in Pakistan.  We do realize that as the Governor of State Bank, you perhaps can not change the law.  However  the following procedural actions can be taken which would meet the intent of law as well as prevent the State Bank from its human right violation of forcing Pakistani citizens to  either declare their faith and Fikah or to  suffer financial losses.


My suggestion would be as follows.

Banks could continue to make Zakat deductions.  However this be done only when a citizen  volunteers  to have his/her Zakat deducted  and is willing to authorize his/her  bank to do so.  This procedure is  well in keeping with the Supreme Court judgment of March 9, 1999 , which recognizes  the right of a Muslim not to have Zakat deducted through banks. This procedure is also well in keeping with the international banking practice of safeguarding a customer’s investment and not confiscating any part of it without his/her written agreement.


I hope that you will be the first State Bank Governor of Pakistan, who has the courage and  professional  wisdom  to change this procedure that  not just violates  human rights but is also against good professional banking practices.


Naeem Sadiq