1. Could you briefly introduce yourself and share your journey in Shariah compliance and Islamic banking?
I have been associated with the Islamic banking industry for above 10 years, with my professional journey focusing mainly on Shariah compliance, Shariah governance, and Shariah review. I have had the opportunity to work with institutions including HABIBMETRO and Standard Chartered, which gave me exposure to both local and international approaches to Islamic banking.
Currently, my role involves overseeing Shariah Compliance and also providing secretarial support to the Shariah Board. Over the years, I have learned that Shariah compliance is not limited to reviewing documents or contracts. It is about ensuring that the approved Shariah principles are actually reflected in the bank’s day to day transactions, systems, processes, and customer dealings.
That practical aspect of Islamic banking has been a major part of my professional journey.
2. With your extensive experience at Standard Chartered and HABIBMETRO, what are the key challenges in maintaining effective Shariah compliance?
I would say one of the biggest challenges is ensuring that the Shariah principles approved at the product or policy level are consistently implemented at the transaction and operational level.
Islamic banking has become much more sophisticated. We now have complex products, automated systems, digital channels and large volumes of transactions. Therefore, maintaining Shariah compliance requires close coordination between Shariah scholars, Compliance, Product, Operations, Technology, Legal and other relevant teams.
Another challenge is maintaining the right balance between business requirements and Shariah requirements. From my experience, the best approach is not to treat Shariah compliance as a separate function, but to make it part of the overall product and business process from the beginning.
3. How can Islamic banks strengthen their day-to-day Shariah compliance across different business segments?
In my view, Shariah compliance needs to be embedded into the business process itself, rather than being considered only as a checking function at the end.
This can be achieved through clear Shariah guidelines, well-defined process flows, appropriate controls and regular Shariah compliance reviews. Staff working in different business areas should also understand not only what they are required to do, but why a particular Shariah requirement exists.
Technology can play an important role as well. Wherever possible, Shariah controls should be incorporated into systems and automated processes so that compliance does not depend entirely on manual intervention.
Ultimately, effective day-to-day compliance comes from a combination of people, processes, systems and continuous monitoring.
4. What role does Shariah compliance review play in ensuring the practical implementation of Islamic banking principles?
Shariah compliance review is extremely important because there can sometimes be a difference between an approved structure on paper and its actual implementation.
A product may be Shariah-compliant in its conceptual structure, but the way transactions are executed, documents are completed, systems are configured or responsibilities are performed can create practical Shariah issues.
The purpose of a Shariah compliance review is therefore not simply to identify exceptions. It also helps the institution understand the root cause of those exceptions and improve the underlying process.
I see the review function as an important feedback mechanism between the Shariah Board, business and operations, helping ensure that Shariah principles remain effective throughout the product lifecycle.
5. How can Shariah Boards and compliance teams work more effectively to ensure timely implementation of Shariah rulings and guidelines?
The relationship between the Shariah Board and the Shariah Compliance function needs to be based on clear communication, proper documentation and timely follow-up.
When a Shariah Board provides a ruling or approval, it is important that the decision is clearly documented and translated into practical requirements for the relevant business and operational teams.
I also believe that maintaining a proper tracking mechanism is very important. Each Shariah Board decision should have clear ownership, an implementation timeline and appropriate evidence of implementation.
The Shariah Compliance team can then monitor progress and bring any outstanding matters back to the Shariah Board where necessary.
6. Based on your experience, what are the most important areas to consider when reviewing Islamic banking products, contracts, and process flows?
I normally look at the transaction from both the Shariah structure and practical execution perspectives.
First, we need to understand the underlying Shariah contract and whether the actual transaction follows the essential requirements of that contract. Then we need to examine the sequence of events, ownership, possession, risk and liability, documentation, pricing and payment arrangements.
The process flow is equally important. We need to ask: Who owns the asset at each stage? Who bears the risk? Who is acting as principal and who is acting as agent? When does the liability arise? And what actually happens in the system?
I also consider whether the contractual documentation accurately reflects the approved Shariah structure and whether the system and operational processes are aligned with it.
In my view, understanding the complete transaction rather than reviewing individual documents in isolation is critical.
7. How important is continuous staff training in developing a strong Shariah compliance culture within Islamic banks?
It is extremely important. You cannot build a strong Shariah compliance culture simply by issuing policies and procedures.
Employees need to understand the basic Shariah principles behind the products they are dealing with. When people understand the rationale behind a requirement, they are much more likely to follow it correctly and identify an issue themselves.
Training should therefore not be limited to Shariah teams. Business, Operations, Product, Legal, Risk and other relevant functions should receive training appropriate to their roles.
I also believe training should be continuous. Islamic banking is evolving, products are becoming more sophisticated, and regulatory and Shariah requirements also develop over time.
8. What is your outlook for the future of Shariah compliance and Islamic banking in Pakistan?
I am quite positive about the future of Islamic banking in Pakistan. There is increasing awareness among customers, businesses and financial institutions, and the regulatory framework for Islamic banking has also continued to develop.
The Federal Shariat Court’s judgment on Riba and the subsequent policy direction of the government have given an additional impetus to the transformation of the financial system. The target of eliminating Riba from the economy by the end of December 2027 means that the transition towards Shariah-compliant banking is likely to accelerate significantly in the coming years.
At the same time, the transition needs to be managed carefully. The current government strategy envisages that, from January 2028, new financing transactions would increasingly be undertaken through Shariah-compliant modes, while existing conventional arrangements may continue until maturity.
Therefore, I believe the percentage and overall share of Islamic banking in Pakistan is likely to increase substantially after 2027. This will create significant opportunities, but it will also place greater responsibility on Shariah Boards, Shariah Compliance functions and the industry as a whole to ensure that this growth is accompanied by genuine Shariah compliance, strong governance and transparency.
I also believe technology will have a significant role to play, particularly in digital Islamic banking, automated Shariah controls, Islamic fintech and more efficient compliance monitoring. Ultimately, the future growth of Islamic banking will depend on maintaining Shariah integrity while continuing to provide competitive, practical and innovative financial solutions.