If all the transactions based on interest are held to be violative of the Islamic injunctions, what will be the treatment of the past transactions and agreements? Especially what procedure should the government adopt with regard to the previous foreign loans?
Foreign loans shall have to be paid with interest agreed upon as fulfilment of the commitment the government has made on behalf of Pakistan (5:1). In relation to domestic loans, the state is not bound to return the Ribā it charged in the past on the loans it gave (2:275). Moreover, the state can stop all payments of Ribā to domestic borrowers with immediate effect as those who are citizens or residents of the state have no right to violate its laws or to insist upon such violation (2:279). However, allowance should be given to such people as are dependent on Ribā on various certificates etc. for their subsistence. The destitute are the direct responsibility of the state, and the state should take immediate steps to bear that responsibility directly before stopping payment of Ribā to such people; also the state should feel the moral responsibility of bringing the nation out of the situation in which it has to borrow on Ribā and of doing that as soon as possible so that in the eyes of God, it is not guilty of co-operation in sin.
Finally, at a later stage, laws should also be enacted to punish those who insist upon Ribā bearing transactions even after no reasonable excuse is left for them to be involved in this crime. (2:279)