June 11, 2006
Governor State Bank of Pakistan
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.
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.