Q1. Tell me something about yourself and your organization, please.
I serve as VP, Head of Shari’ah Controle Department at Watania Takaful Dubai UAE, where my responsibility is to ensure that every product, document, and investment of the company conforms to the principles of Shari’ah. My own training is in the classical Islamic sciences; I completed my specialization in Fiqh, Ifta, Qada and later my doctorate, and I have spent the better part of my career at the meeting point of Fiqh and modern finance. Supervising Islamic Banking and Takaful operations is detailed work: the participants’ banking products, Investment funds, the Wakalah based Takaful structure, claim settlements, surplus distribution, and all pass through Shari’ah review.
Watania Takaful Family and General operates under the Takaful Rules, issued by the CB-UAE and HSA. On the Wakalah and Mudharaba model, scholars developed and that has since been adopted well beyond GCC contries. The company maintains a clear separation between the Participants’ fund, which belongs to the Participants collectively, and the Shareholders’ fund. Our Shari’ah Committee reviews operations, certifies products before launch, and conducts annual Shari’ah audits.
Q2. How would you comment on the elimination of Riba in Pakistan?
The elimination of Riba is a Quranic command, not a policy preference, and Pakistan is under both a religious and a constitutional obligation to achieve it. The Federal Shariat Court’s judgment of April 2022 declared the interest-based system repugnant to the injunctions of Islam and directed its complete transformation by the end of December 2027. The government withdrew its appeals against that judgment, and the 26th Constitutional Amendment went further by writing the deadline of 1st January 2028 into Article 38(f) of the Constitution itself. So the direction is settled; the question now is execution.
Progress is real. Islamic banking today accounts for roughly a fifth of total banking assets and about a quarter of deposits, the government has been raising funds through Sukuk instead of interest-bearing instruments, and several banks are converting entirely as per my information. My caution is that conversion must be substantive, not cosmetic. Renaming an interest-bearing product does not purify it. The transformation will succeed only if Shari’ah governance is strong, scholars are involved at the design stage, and the public sees a genuine difference in how Islamic institutions treat their customers.
Q3. How could the Takaful sector promote Islamic Finance in Pakistan?
Takaful is the natural completion of Islamic finance. A customer may keep his deposits in an Islamic bank and finance his house through Diminishing Musharakah or Ijara Muntahiya Bittamliek, but if his life, health, and property cover still come from a conventional insurer, his financial life remains incomplete. Every Islamic bank financing need Shari’ah-compliant coverage behind it, so the growth of Islamic banking and of Takaful reinforce one another. Bancatakaful, where Takaful products are distributed through Islamic banking branches, is the most direct bridge between the two.
The sector also serves people conventional insurance never reached. Insurance penetration in Pakistan is below one percent of GDP, and a large part of that gap is religiously motivated reluctance. When people understand that Takaful is built on tabarru and mutual assistance rather than a commercial exchange of risk for premium, many who refused insurance on grounds of conscience become willing participants. Microtakaful for low-income households, crop and livestock Takaful for farmers, and awareness campaigns in plain language can bring millions into the documented, Shari’ah-compliant financial system for the first time.
Q4. How would you compare the Takaful sector of today with that of the past?
The difference is substantial. When the SECP issued the first Takaful Rules in 2005 and the pioneer operators began work in 2006 and 2007, Takaful was an experiment. Operators had to explain the very concept before they could sell a policy, distribution was thin, and re-Takaful capacity was scarce, so operators often had to fall back on conventional reinsurance under the doctrine of necessity.
Today the sector stands on far firmer ground. The Takaful Rules, 2012 allowed conventional insurers to open window Takaful operations, and after the initial litigation was resolved, the windows began in 2014-15. We now have dedicated Takaful operators alongside dozens of window operations, covering both family and general business. Takaful contributions have reached about twelve percent of the insurance sector, and the SECP has set a target of taking that share to thirty-five percent by 2028. Product breadth, actuarial expertise, Shari’ah governance frameworks, and digital distribution have all matured. What remains constant from the early days is the need for awareness; the concept is still new to most Pakistanis, and that is where the real work lies.
Q5. Please explain the benefits of Takaful?
The first benefit is peace of conscience. Conventional insurance involves riba, gharar, and qimar in its underlying contract, because the policyholder pays a premium against an uncertain counter-payment. Takaful removes these elements by changing the nature of the contract itself: participants donate contributions into a common waqf fund on the basis of tabarru, and claims are paid from that fund as mutual assistance. The relationship is cooperation among participants, not a commercial wager between a company and a client.
Beyond permissibility, the model carries practical advantages. The participants’ fund belongs to the participants, so if it generates a surplus after claims and reserves, that surplus can be distributed back to them, something a conventional policyholder never receives. The operator’s remuneration is a disclosed wakalah fee, which makes the cost structure transparent. Contributions are invested only in Shari’ah-compliant avenues such as Sukuk and Islamic equities, so the participant’s money is not deployed in industries he considers unlawful. And the entire operation is supervised by a Shari’ah Board and audited for compliance, an extra layer of oversight that conventional insurance does not carry.
Q6. Could you tell us about the future strategies and products of the Takaful sector?
The strategic direction is set by two facts: the constitutional deadline for eliminating Riba, and the SECP’s target of raising Takaful’s share of the insurance market to thirty-five percent by 2028. Reaching that target requires the sector to move beyond the urban salaried class. Microtakaful is central to this: low-contribution products for health, life, and livelihood protection, distributed through mobile wallets and branchless banking so that a laborer or a small farmer can participate for a few hundred rupees. Crop and livestock Takaful, ideally supported by government premium subsidy on the pattern of existing crop insurance schemes, can protect the rural economy on Shari’ah-compliant terms.
On the product side, I expect strong growth in family Takaful savings and education plans, health Takaful for employers, and coverage linked to Islamic housing and SME finance as banks convert their portfolios. Digital onboarding, embedded Takaful sold at the point of sale, and usage-based motor products are already appearing. Two structural needs must also be addressed: building domestic re-Takaful capacity so the industry does not depend on conventional reinsurance, and developing Takaful-based pension and annuity alternatives as the Riba-free transformation reaches retirement products. If the sector pairs these products with sustained public education, the coming five years can achieve more than the last twenty.