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Zakat deduction, Billions withdrawn from banks

Zakat deduction, Billions withdrawn from banks

Author: Javed Mahmood
Publication: The Nation
Date: October 6, 2005
URL: http://www.nation.com.pk/daily/oct-2005/6/index7.php

To avoid deduction of Zakat, thousands of bank account holders have withdrawn billions of rupees from their saving accounts a few days ahead of the deduction of Zakat, it was learnt on Wednesday.

Like past, countless account holders have also converted billions of rupees deposits into Call Deposit Receipts (CDR), which would be deposited again into the original accounts soon after the deduction of Zakat on Wednesday (today), the first day of the holy month of Ramadan. A senior banker told The Nation that during the last few days the account holders were withdrawing heavy amounts from their saving accouants so that the banks could not deduct Zakat.

He said that several customers have converted their deposits into CDR to avoid the payment of Zakat.

This year 2.5 per cent Zakat is applicable on Rs 9,206 or above balance of saving accounts of the bank customers.

He said that from Thursday the people would again deposit the money, encashed or converted into Call Deposit Receipts.

It would be very difficult to guess the actual amount of money, either withdrawn from banks or converted into CDRs, said the banker, adding the amount could be in billions of rupees and might be more than 12-15 billion rupees.

He also disclosed that during last few days several account holders have submitted attested affidavits to the banks, strongly opposing the deduction of Zakat from their accounts.

It may be noted here that every year, a few days before the deduction of Zakat, billions of rupees are withdrawn from the banks so that the bankers could not deduct Zakat.

According to a recent report of the Ministry of Finance, the collection and disbursement of Zakat had declined substantially in last two to three years, showing flaws in the system.

The report has stressed the need to put in place a sound mechanism to prevent the Zakat system from collapsing in the years to come.


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