Interview with Mr. Muhammad Raza, Senior Executive Vice President Meezan Bank
PAGE: Tell me something about yourself, please:
Muhammad Raza: I currently serve as Senior Executive Vice President and Group Head of General Services and Customer Support at Meezan Bank. My career spans more than 34 years, beginning at MCB before I joined Meezan Bank in February 2003. That moment was particularly historic, as I took charge as Branch Manager of the bank’s very first branch in Karachi, located in Gulshan-e-Iqbal. Since then, I have been deeply engaged in the evolution and expansion of Islamic banking in Pakistan.
Academically, I hold a Bachelor’s degree in Engineering from NED University and a Master’s in Business Administration from IoBM. In addition, I have pursued multiple professional qualifications, including an Associate Diploma from the Institute of Bankers, Pakistan; a Postgraduate Diploma in Islamic Banking and Finance from the Centre of Islamic Economics; and completion of the Islamic Scholar Course ( Dars e Nizami) from Al-Furqan Scholars Academy.
Over the course of these decades, I have gained broad-based experience across retail and consumer banking, with more than 23 years dedicated specifically to Islamic banking. My portfolio covers strategy, innovation, transformation, branch banking, liability sales, product development, service quality, consumer finance, wealth management, collections and recovery, training, administration, and engineering. Alongside my banking career, I am also a certified trainer, conducting both in-house and external training programs.
Beyond the institution, I have contributed to the industry at large, serving on committees at the State Bank of Pakistan, as a member of the Pakistan Banks’ Association Consumer Subcommittee, and as former Chairman of the Mortgage Forum of the PBA. With a strong grounding in Shariah, developed through years of collaboration with scholars and Meezan Bank’s Shariah Department, I view my journey not only as a professional career but as a mission—to help Islamic banking establish itself as a leading force in Pakistan’s financial system.
PAGE: What is your perspective about the constitutional mandate to eliminate interest (Riba) from the financial system in Pakistan by January 2028?
Muhammad Raza: Pakistan’s constitutional commitment to eliminate Riba from the financial system before 1 January 2028 represents far more than a regulatory deadline. It is a structural reform agenda that will require disciplined execution, institutional capacity and credible Shariah-compliant alternatives that match or exceed the service standards of conventional banking. Done well, the transition could reshape Pakistan’s financial system around principles of fairness, transparency and real economic activity.
The first priority must be stability. Existing deposits, financing arrangements, government debt, foreign obligations and long-term contracts cannot be transformed through a single policy action. They will require a phased, legally sound and commercially viable conversion framework that protects liquidity, preserves access to credit and maintains confidence in the payment and financial systems.
The legal and fiscal architecture must also evolve. Islamic contracts such as Ijarah, Murabaha, Musharakah, Mudarabah and Sukuk should receive clear legal recognition and should not be placed at a tax, accounting or regulatory disadvantage. Contract enforcement, recovery mechanisms, accounting standards and dispute-resolution processes must be aligned with the distinct nature of Islamic finance.
Equally important is the strength of Shariah governance. Public confidence will depend on consistent standards, qualified scholars, independent audits, transparent disclosures and effective mechanisms for addressing differences in interpretation. These safeguards are essential to ensure that the transition is substantive rather than cosmetic.
Viewed in this context, the January 2028 deadline should serve as a catalyst for comprehensive reform. The objective is not merely to replace one set of financial products with another, but to build a financial system that is fully aligned with the principles of our faith, financially sound and resilient, globally competitive and closely connected to productive sectors of the economy, thereby fostering sustainable and inclusive economic growth.
PAGE: Islamic banking in Pakistan accounts for over 25% of industry deposits. What is your standpoint on it?
Muhammad Raza: Islamic banking’s share of more than one-fourth of Pakistan’s banking deposits marks a significant shift in the country’s financial landscape. By December 2025, Islamic banking deposits had reached approximately PKR 11.04 trillion, representing 27.8% of total industry deposits. This confirms that Islamic banking is no longer a niche segment, but an established and rapidly growing part of the financial system.
This growth reflects genuine customer demand for Shariah-compliant financial services. It also shows that the appeal of Islamic banking is driven not only by commercial value, but by its alignment with customers’ beliefs. Importantly, Islamic banking is not simply redirecting deposits from conventional banks; it is also bringing new customers and additional funds into the formal financial system.
The next challenge is to ensure that deposit growth is matched by stronger institutional capacity and greater economic impact. This will require qualified professionals, robust Shariah governance, wider public awareness and a coordinated transition framework involving the Government, regulators and financial institutions.
Crossing the 25% threshold is therefore a strong vote of public confidence. The sector’s next phase, however, must focus as much on quality as on scale. Deposits should be channelled into productive financing for businesses, SMEs, housing, agriculture and infrastructure, while the industry continues to strengthen Shariah authenticity, customer experience, digital access, liquidity management and professional capacity.
If these priorities are addressed, Islamic banking can play a central role in expanding financial inclusion and supporting Pakistan’s transition towards a Riba-free financial system.
PAGE: How would you elaborate the Shariah compliant solutions ranging from personal financing to corporate Sukuk bonds?
Muhammad Raza: The strength of Islamic banking lies in the breadth of its product suite. Over the past two decades, the industry in Pakistan has developed a complete range of Shariah-compliant solutions that serve the salaried individual, the small trader, the large corporate and the sovereign alike. The distinguishing feature throughout is that every transaction is anchored in a real asset, a genuine trade or a shared enterprise, rather than in the lending of money at a predetermined return.
At the consumer level, this principle changes the very nature of the offering. Islamic banks do not generally extend personal cash loans; instead they meet the customer’s underlying need through asset-based structures. Home financing is provided through Diminishing Musharakah, under which the bank and the customer jointly own the property and the customer progressively purchases the bank’s share while paying rent on the portion still owned by the bank. Vehicle financing is offered on the basis of Ijarah, a lease in which the bank owns the asset and bears the associated ownership risks. Consumer durables, equipment and other tangible needs are financed through Murabaha, where the bank purchases the goods and sells them to the customer at a disclosed cost-plus price. In each case, the customer knows exactly what is being bought, at what price and on what terms.
On the deposit and savings side, the relationship is one of partnership rather than debt. Current accounts are maintained on the basis of Qard, while savings and term deposits operate under Mudarabah, where depositors participate as investors and share in the actual profits earned from a Shariah-compliant pool of assets. This is complemented by a wider ecosystem of Takaful for protection needs, Islamic mutual funds, voluntary pension schemes and Shariah-compliant wealth-management and advisory services, allowing customers to keep their entire financial life within a Halal framework.
For the SME and commercial segment, the range extends further. Working capital requirements are met through Murabaha, Salam and Running Musharakah; manufacturing and construction requirements through Istisna; and asset acquisition through Ijarah and Diminishing Musharakah.
At the corporate and institutional level, Sukuk represent the most visible expression of Islamic capital markets. Unlike conventional bonds, which evidence a debt obligation, Sukuk represent proportionate ownership in identifiable assets, usufruct or a business venture, with returns generated by rentals, trading profits or project income. Pakistani corporates have raised substantial funding through Ijarah, Musharakah, Hybrid and Shirkat-ul-Aqd based Sukuk to finance plants, power projects, expansion and refinancing, while the Government of Pakistan has issued domestic and international Sukuk, including listings on the Pakistan Stock Exchange that have broadened the investor base and improved price discovery. Syndicated Islamic facilities, project finance and Islamic liquidity-management instruments complete the corporate offering.
Taken together, these solutions demonstrate that Islamic banking is a complete financial system rather than a limited alternative. The next stage of development lies in deepening the secondary Sukuk market, expanding equity-based and participatory modes such as Musharakah and Mudarabah, extending outreach to underserved segments including agriculture, low-cost housing and microenterprise, and delivering all of this through digital channels that match the convenience customers now expect. If the industry continues on this path, it will be well positioned not only to meet the requirements of the 2028 transition, but to serve as a genuine engine of productive and inclusive economic growth.
PAGE: How would you comment on the framework for integrating Islamic economic principles into Pakistan’s economy?
Muhammad Raza: Pakistan’s integration of Islamic economic principles should be approached as a comprehensive transformation of the financial ecosystem, rather than a simple conversion of conventional products into Islamic alternatives. It requires coordinated reform across banking, public finance, capital markets, taxation, legislation, regulation, education and the real economy.
The objective should be to establish Islamic finance as a credible, competitive and preferred financial system. This will require strong institutions, robust Shariah governance and products and services that meet or exceed the standards offered by conventional finance. Greater government support, wider Sukuk issuance and the gradual conversion of public-sector financing to Islamic modes will also be essential to building a genuinely Riba-free economy.
A clear, time-bound national roadmap is therefore critical. The Government, State Bank of Pakistan, regulators, financial institutions and Shariah scholars must work together to reform interest-based laws, expand Islamic liquidity-management instruments, strengthen the Sukuk market and develop qualified Islamic-finance professionals.
This transformation must be phased, practical and institution-wide. Harmonizing Shariah standards, simplifying conversion procedures, integrating Islamic finance into the legal framework and increasing public awareness will be central to its success. The ultimate goal should not be conversion for its own sake, but the creation of a stable, inclusive and productive financial system aligned with Islamic economic principles.