{ "schema_version": "qanun-law-text/1", "id": "pk-code-a7a08f1ec2211075", "title": "Islamabad Capital Territory Prohibition of Interest of Private Loans Act, 2023", "source_collection": "Federal", "content_kind": "stored_law_text", "content_extent": null, "source_url": "https://pakistancode.gov.pk/alpha/UY2FqaJw1-apaUY2Fqa-apaUY2Npa5lkaw%3D%3D-sg-jjjjjjjjjjjjj", "version": null, "source_snapshot": null, "legal_status": "not independently verified", "text_quality": "Complete stored UTF-8 TXT file recovered byte-for-byte from owned Drive. Source transcription retained verbatim; legal completeness, OCR accuracy and current consolidation unverified.", "text_sha256": "94a699249872515f6e5508cef610888cc45e6e1feec4268eb43ad5c947cfc0bc", "source_sha256": "94a699249872515f6e5508cef610888cc45e6e1feec4268eb43ad5c947cfc0bc", "text_version_id": "law:pk-code-a7a08f1ec2211075:sha256:94a699249872515f6e5508cef610888cc45e6e1feec4268eb43ad5c947cfc0bc", "quality_flags": [], "encoding": "UTF-8", "text": "Page 1 of 5 \r\n \r\n \r\n \r\n \r\n \r\n \r\nTHE ISLAMABAD CAPITAL TERRITORY PROHIBITION OF \r\nINTEREST ON PRIVATE LOANS ACT, 2023 \r\n \r\n \r\n \r\nCONTENTS \r\n___________ \r\n \r\n \r\n1. Short title, extent and commencement \r\n2. Definitions \r\n3. Prohibition of Private Money Lending \r\n4. Punishment for Abetment \r\n5. Punishment for Molestation \r\n6. Complaint \r\n7. Liability to pay interest on debt to stand extinguished \r\n8. Offences to be tried by Court \r\n9. Cognizance of offences \r\n10. Adjustment of principal amount \r\n11. Recovery of sums \r\n12. Appeal \r\n13. Power to deposit in Court money due on loan \r\n14. Act to override other laws, etc. \r\n15. Indemnity \r\n16. Power to make rules \r\n17. Interpretation \r\n18. Repeal \r\n \r\n\r\n \r\nPage 2 of 5 \r\n \r\nTHE ISLAMABAD CAPITAL TERRITORY PROHIBITION OF INTEREST \r\nON PRIVATE LOANS ACT, 2023 \r\n \r\n[9th January, 2023] \r\n \r\nACT NO. III OF 2023 \r\nAn Act to prohibit the business and practices of private money-lending and advancing loans and \r\ntransactions based on interest \r\nWHEREAS the injunctions of Islam as laid down in the Holy Qur’an and Sunnah have \r\nexplicitly and unequivocally prohibited charging interest on loans and have declared war against those \r\nwho do not abandon interest; \r\nAND WHEREAS the Constitution of the Islamic Republic of Pakistan obliges the State to take \r\nsteps to enable the Muslims of Pakistan, individually and collectively, to order their lives in accordance \r\nwith the fundamental principles and basic concepts of Islam and to provide facilities whereby they \r\nmay be enabled to understand the meaning of life according to the Holy Qur’an and Sunnah; \r\nAND WHEREAS it is expedient to make a comprehensive Legislation on the subject for \r\ncovering all the aspects of the mischief of private money lending and matters akin thereto; \r\nIt is hereby enacted as follows:— \r\n1. Short title, extent and commencement.––(1) This Act may be called the Islamabad Capital \r\nTerritory Prohibition of Interest on Private Loans Act, 2023. \r\n(2) It extends to the Islamabad Capital Territory. \r\n(3) It shall come into force at once. \r\n2. Definitions. — In this Act, unless there is anything repugnant in the subject or context— \r\n \r\n(a) “abetment” has the same meaning as assigned to it in section-107 of the Pakistan \r\nPenal Code, 1860 (Act XLV of 1860); \r\n \r\n(b) “borrower” or “debtor” means a person to whom a loan is advanced; \r\n \r\n(c) “Code” means the Code of Criminal Procedure, 1898 (Act No.V of 1898); \r\n \r\n(d) “financial institution” includes the State Bank of Pakistan, a commercial or \r\ninvestment bank, a leasing company, a modaraba or other concerns, so defined \r\nin terms of section 2 (a) of the Financial Institutions (Recovery of Finances) \r\nOrdinance, 2001 (Ordinance No. XLVI of 2001); \r\n \r\n(e) “Government” means the Government of Pakistan; \r\n \r\n(f) “Interest” includes any amount, big or small, over the principal, in a contract of \r\nloan or debt, regardless of whether the loan is taken for purpose, of consumption \r\nor for some production activity, whether the same is charged or sought to be \r\n \r\nPage 3 of 5 \r\n \r\nrecovered specifically by way of interest or otherwise, or found so to be \r\nrecoverable by a competent Court; \r\n \r\n(g) “Interest based transactions” include transactions,— \r\n \r\n(i) where differences in prices are exchanged without any intention of \r\nexchange of goods by the parties involved; or \r\n \r\n(ii) where sale is made on credit for higher price and repurchase of the \r\nsame for lower price on cash, basis by the original owner in a given \r\ntransaction; or \r\n \r\n(iii) where two prices are stipulated in the same deal that is to charge \r\nlower or discounted price for shorter period or given listed price for \r\nlonger period by the buyer in a given transaction; \r\n \r\n(h) “loan or debt” means an advance whether of money or in kind, where the \r\nrepayment is guaranteed on demand or after a specified period; \r\n \r\n(i) “Molest”— a person shall be deemed to molest another person if he,— \r\n \r\n(i) obstructs, or uses violence or criminal force to or criminally \r\nintimidates, such other person; \r\n \r\n(ii) interferes with any property owned or used by him or deprives him \r\nof, or hinders him in the use of any such property; and \r\n \r\n(iii) does any act calculated to intimidate the members of the family or \r\nsuch other person; \r\n \r\n(j) “money lender ” means a person, other than the Federal or Provincial \r\nGovernment or a financial institution, who lends money on interest or deals in \r\ninterest based transactions and includes any person appointed by him to be in -\r\ncharge of a branch office or branch offices or a liaison office or any other office \r\nby whatever name called, of his principal place of business and a pawn broker \r\nwho carries on the business, of taking goods and chattels In pawn or pledge for \r\na loan, offering payday loans, small personal loans or credit chits; \r\nExplanation.—Where a money lender is resident outside the Islamabad Capital \r\nTerritory, the agent of such person resident in that area, shall be deemed to be \r\nthe money lender in respect of that business for the purposes of this Act; \r\n(k) “Prescribed” means prescribed by the Rules made under this Act; \r\n \r\n(l) “principal amount” in relation to loan means the amount actually lent to the \r\ndebtor; and \r\n \r\n(m) “Rules” means the Rules made under this Act. \r\n \r\nPage 4 of 5 \r\n \r\n3. Prohibition of Private Money Lending.—(1) No money lender either individually or \r\ningroup of persons shall lend money for any purpose or advance loan to any person for the purpose of \r\nreceiving interest thereon, nor shall carry on an interest based transaction in the Islamabad Capital \r\nTerritory. \r\n(2) Whoever contravenes the provisions of sub-section (1) shall be punished with imprisonment \r\nof either description which may extend to ten years but shall not be less than three years and shall also \r\nbe liable to fine not exceeding one million rupees. \r\n4. Punishment for Abetment.— Whoever intentionally and willfully abets, engages, assists \r\nor aids the money lender in lending money or in recovery of interest or in interest based transaction in \r\ncontravention of sub-section (1) of section 3 shall also be liable to the same punishment as provided \r\nin sub-section (2) of section 3 of this Act. \r\n5. Punishment for Molestation.— Whoever molests any borrower or debtor, whether on his \r\nown behalf or on behalf of anybody else with intention to force such borrower or debtor to pay back \r\nany loan or debt or any part thereof or any interest thereupon, shall be punished with imprisonment of \r\neither description for is term which may extend to five years and shall also be liable to fine up to five \r\nhundred thousand rupees. \r\n6. Complaint.— A justice of peace shall, within three days on receipt of any application or \r\ncomplaint with regard to the commission of an offence under this Act, order the local police to, register \r\na case against such person or group of persons. \r\n7. Liability to pay interest on debt to stand extinguished.— On the commencement of this \r\nAct, every obligation of any debtor or borrower to pay interest on debt or such part of interest shall \r\nstand extinguished. \r\n8. Offences to be tried by Court.— No Court inferior to that of Judicial Magistrate of the first \r\nclass shall try an offence under this Act \r\n9. Cognizance of offences.— Notwithstanding anything to the contrary contained in the Code \r\nor any other law for the time being in force an offence under this Act shall be cognizable, non-\r\ncompoundable and non-bailable. \r\n10. Adjustment of principal amount.— The trial court, if it is proved that the money lender \r\ncommitted an offence under this Act, shall order that the interest already paid to the money lender is \r\nconsidered as payment towards the principal amount: \r\n \r\nProvided that where the amount of interest paid by a borrower exceeds the principal amount, \r\nthe court shall order the money lender to return such excess amount to the borrower. \r\n11. Recovery of sums.— Where penalty imposed on money lender under this Act or the \r\namount ordered to be returned, is not paid,— \r\n(a) the Court may order to recover the amount so payable by selling the assets \r\nbelonging to such person; and \r\n(b) in case the amount cannot be recovered from such person in the manner \r\nprovided in paragraph (a) the Court may prepare and sign a certificate \r\nspecifying the amount due from such person and send it to the collector of the \r\ndistrict in which such person owns any property or resides or carries on \r\n \r\nPage 5 of 5 \r\n \r\nbusiness; and the collector of the district on receipt of such certificate shall \r\nproceed to recover from the said person the amount specified in the certificate \r\nas if it is an arrear of land revenue. \r\n12. Appeal.— Save as provided, any person aggrieved by any decision given, sentence passed \r\nor order made by the trial court under this Act, may within thirty days of such decision, sentence or \r\norder prefer an appeal under the provisions contained in chapter XXXI of the Code. \r\n13. Power to deposit in Court money due on loan.— (1) Where any lender, whether a money \r\nlender as defined in this Act or otherwise, refuses to accept the whole or any portion of the money or \r\nother property due in respect of his loan without payment of interest, the debtor may deposit the said \r\nmoney or property into the Court having jurisdiction to entertain a suit for recovery of such loan and \r\napply to the Court record full or part satisfaction of the loan, as the case may be. \r\n(2) Where any such application is made, the Court shall, after due inquiry, pass orders recording \r\nfull or part-satisfaction of the loan as the case may be. \r\n(3) The procedure laid down in the Code of Civil Procedure, 1908, (Act No. V. of 1908), for \r\nthe trial of suits shall, as far as may be, apply to applications under this section. \r\n(4) An appeal shall, lie from an order passed, by a Court under sub-section (2) within thirty \r\ndays excluding the time for obtaining a certified copy of the order as if such an order relates to the \r\nexecution, discharge or satisfaction of a decree within the meaning of section 47 of the Code of Civil \r\nProcedure, 1908 (Act No. V of 1908). \r\n14. Act to override other laws, etc.— The Provisions of the Act shall have effect \r\nnotwithstanding anything contained in any other law for this time being in force or in any instrument \r\nhaving effect by virtue of any such law. \r\n15. Indemnity.— No suit, prosecution or other legal proceeding shall against any person for \r\nanything which is in good faith done or intended to be done in pursuance of this Act or of any Rules \r\nmade thereunder. \r\n16. Power to make rules.— The Federal Government may, by notification in the Official \r\nGazette and within one hundred and twenty days from the commencement of this Act, make Rules for \r\ncarrying out the purposes of this Act. \r\n17. Interpretation.— In the interpretation and application of the provisions of this Act, and in \r\nrespect of matters ancillary or akin thereto, the Court shall follow the injunctions of Islam as laid down \r\nin the Holy Qur’an and Sunnah. \r\n18. Repeal.—The West Pakistan Private Money Lenders Ordinance, 1960 (W.P. Ordinance \r\nXXIV of 1960) shall be repealed. \r\n \r\n \r\n \r\n______________ \r\n \r\n \r\n \r\n RGN. 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