🎙️ Episode 81: 🇵🇰 Can Islamic Finance Fix Pakistan’s Economy?

Pakistan is moving towards an interest-free Islamic financial system, but can Islamic finance really fix economic challenges or are public expectations misplaced?

In Episode 81 of Majlis & Markets, Farrukh Raza from IFAAS explains why Islamic finance is not designed to create jobs overnight, how liquidity surpluses and sovereign debt complicate reform, and why this transition is ultimately about aligning Pakistan’s financial system with its Constitution, the Qur’an, and the Sunnah.

We explore the ethical foundations of Islamic finance, the risks of misunderstanding its role and what success should realistically look like as Pakistan moves toward an Islamic economy. 

This episode builds on an article from April 2025 on the challenges facing Pakistan’s interest-free banking push:
👉 https://salaamgateway.com/story/pakistans-push-for-an-interest-free-banking-system-faces-challenges

Topics covered

• Islamic finance and Pakistan’s economy
• Interest-free banking in practice
• Job creation myths and public expectations
• Liquidity and sovereign debt challenges
• Constitutional principles, Qur’an and Sunnah
• Ethics, transparency, and trust

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Chapters

• 0:00 Intro
• 1:44 Guest background
• 4:05 Pakistan’s move towards Islamic finance
• 8:01 Practical implications of interest-free banking
• 10:56 Comparisons with other countries
• 15:15 Sovereign debt and liquidity issues
• 24:57 Institutional coordination
• 31:06 Capacity and expertise
• 34:14 Public awareness and acceptance
• 40:38 Opportunities from Islamic economy
• 44:22 Standardisation
• 45:43 Addressing economic pressures
• 50:14 Technology and innovation
• 54:44 Measuring success