The Sindh province High Court said there was no justification for freezing the bank accounts of Al-Rasheed Trust, which operated several offices and relief centres in Afghanistan under the Taliban.
The State Bank of Pakistan froze Al-Rasheed’s accounts a few days after the September 11 attacks in the United States.
The charity was then blacklisted by the US State Department as a terrorist organisation.
Pakistani security agencies alleged the trust was associated with the Taliban and other Islamic groups.
But the court said the trust was involved only in humanitarian services.
Al-Rasheed spokesman Basheer Abdullah welcomed the decision.
“We are only a relief and welfare organisation. We have nothing to do with terrorism”
Basheer Abdullah – Al Rasheed Trust
He said: “It is a great victory for us. We are thankful to Almighty Allah.
“We are only a relief and welfare organisation. We have nothing to do with terrorism.”
He said despite the freezing of its accounts, the trust had continued its operations in Pakistan and parts of Afghanistan.
The Pakistani Central Bank has frozen at least 24 accounts held by outlawed Islamic groups since the country became a partner in the US-led war against terror.
These accounts contained more than $10.2 million.