Digital banking full of promise.

Byline: KHALIL AHMED

Digital banking full of promise - cryptocurrencies

The use of blockchain, cryptocurrencies, crypto gaining momentum

Technology progress is steady in financial services

Interview with Mr. Jawad Tahsin - Vice President and Unit Head Shariah Compliance Department, Meezan Bank Limited

PAGE: Tell me something about yourself, please.

Jawad Tahsin: I have been working in the banking industry of Pakistan for around 11 years. I am a business graduate from the Institute of Business Administration (IBA), Karachi with majors in MIS and Finance. Right now, I am working as Vice President and Unit Head Shariah Compliance Department at Meezan Bank Limited. Prior to this, I worked at Faysal Bank as a Product Manager of Islamic Assets.

My Experience in banking mainly comprises working in Product Development and Shariah Compliance departments respectively. I have closely worked on and reviewed the recent digital initiatives as implemented by the State Bank of Pakistan including Islamic Roshan Digital Account and Islamic Naya Pakistan Certificates. Additionally, I have also worked on various Shariah-compliant digital financing products developed and implemented in my employer bank.

PAGE: Could you give your perspective on digital banks in Pakistan?

Jawad Tahsin: The landscape for digital banks in Pakistan looks promising due to cryptocurrencies. With approximately 64% young population in the country, most of them interested in cryptocurrencies, and a banking population of less than 30%, the sky is really the limit. There is so much potential for digital banks and they can really play an important part in improving financial inclusion in the country.

So far the State Bank of Pakistan (SBP) has taken the right step and issued 5 digital banking licenses for setting up new digital banks in the country. However, out of these 5 banks, only 2 licenses have been issued for Islamic digital banks. In a country with a 96% Muslim population with strong religious roots, interest is one of the important reasons why conventional banks' penetration in the financial sector is still low.

And furthermore, in the context of the recent Federal Shariat Court decision regarding the conversion of the banking sector by 2027, it was understandable that all 5 digital banking licenses should have been issued for Islamic Digital Banks since they anyway would need to be converted by 2027. However, nonetheless, it would be interesting to see how these new digital banks...