THIS is with reference to the editorial `Islamic banking` (July 6). For decades, Muslims have debated whether banl( interest is the riba that is forbidden in Islamic law. However, this might be the wrong question. The real focus should be onunderstandingthe type ofloan that Islamic principles prohibit extra charges on.

Three approaches can help us understand this complex issue.

The first, the Tradition-First view, is the majority view taught in seminaries.

It applies the same rule to all loans, declaring any extra over principal as riba andforbidden.Bankinterestis thus considered unacceptable. While this view has continuity, it does lack context as the classical scholars never saw modern banking systems.

The second approach, the Purpose-First view, focuses on why riba was banned.

It argues that the prohibition aims at preventinginjustice and debt traps.

Regulated bank loans, with capped rates and consumer protection, do not fit this description. This view separates function from form, suggesting that banl( interest is not the forbidden riba.

The third approach, the Category-First view, emerges from my own analysis of Islamic finance shaped by decades of hands-on experience in the field, including introducing Islamic banking regulations in Pal(istan and serving on the Shariah Board of the State Bank of Pakistan (SBP).

It starts with historical context: trade was predominantly barter-based, and loans were mostly trade credit (bai`mu`afal).

Islam created a new category of social loans (qard hasana), where no marl(up was permissible. The ban on extra charges applied to these social loans aimed at helping those in need. In essence, it means that Islam has not banned profit on time.Instead, it has banned profiting from poverty.

This approach fits modern economics better. Banks provide commercial loans for houses, factories and cars these are not social loans. Calling banl(interest riba might be a category error, making something permissible unacceptable. This view removes hypocrisy, protects the poor, aligns with Shariah`s purpose, and restores the originalcontext.

Why does this matter? Muslims already use creditcards andloans,0ften athigher costs through Shariah-compliant products.

A clearer understanding would protect the vulnerable and free the productive.

Regulating social loans, where exploitation happens, should be the real priority.

Muslims do not need to choose between faith and finance. They need to choose between injustice and justice.

This is surely not a decree (fatwa), but an invitation to rethinl( assumptions.

The goal is to prevent economic slavery, not to restrict economic tools. The door of independent reasoning (ijtihad) has remained open; it is time to walk through it with humility and data.

The implications are significant. A more nuanced understanding of riba could unlock financial inclusion, innovation and growth in Muslim-majority economies.

It could also redirect focus to where it is needed the most protecting the poor and promoting fair transactions.

In Pakistan, Islamic banl(s hold a signiñcantshare ofassets,butstruggle to meet the needs of small businesses.

Globally, Muslims are seel(ing financial solutions that align with their values.

Perhaps it is time to revisit the principles,notjust the practices, and craft financing systems that are honest and inclusive as well as Shariah-consistent.

The future of Islamic finance depends on it.

Pervez Said California, US