Zafar Masud in Khaleej Times says sustainable growth will increasingly depend on expanding credit to the real economy, particularly in sectors such as SMEs, agriculture, housing, and export-oriented industries

The Bank of Punjab is committed to shaping a resilient, future-ready economy by placing digital lending and women entrepreneurship at the centre of its long-term vision and integrating green financing, climate-aligned lending, and sustainability initiatives into its broader strategy, its top official says.

Zafar Masud, President and CEO, Bank of Punjab (BOP) and Chairman of Pakistan Banking Association (PBA), said the financial institutions have an important role to play in supporting investments that improve resilience and sustainability to overcome climate change challenge.

In an exclusive interview, Masud underlined the need to give due importance to climate change and its adverse impact on developing countries including Pakistan.

“One important point I would highlight is the growing importance of sustainable and climate-resilient finance. Countries like Pakistan are among the most vulnerable to climate change, particularly in sectors such as agriculture and water resources. Financial institutions, therefore, have an important role to play in supporting investments that improve resilience and sustainability,” he said.

See also: Taking the Climate Action Agenda Forward in Pakistan

Excerpt of the Interview of Zafar Masud in Khaleej Times

What is your view about the overall business environment in the present global and regional situation? What should be Pakistan’s strategy?

The global economy is currently navigating a complex combination of geopolitical tensions, supply chain disruptions, inflationary pressures, and tighter global financial conditions. For emerging economies like Pakistan, these developments create both challenges and opportunities.

The regional situation has underscored how vulnerable global trade, energy supply routes, and financial markets remain to geopolitical shocks. At the same time, it has also accelerated structural shifts in global supply chains and digital financial infrastructure.

Pakistan’s strategy should therefore focus on three key priorities.

First, macroeconomic stability must remain the central objective. Sustainable fiscal consolidation, strengthening of external balances, and maintaining investor confidence are essential to avoid cyclical crises.

Second, Pakistan must accelerate export-oriented growth and regional trade integration. Our economy cannot continue to rely primarily on domestic consumption and imports. Expansion in value-added exports, agriculture productivity, IT services, and logistics connectivity will be critical.

Third, the country must continue investing in digital infrastructure and financial inclusion. The rapid adoption of digital payments, fintech, and mobile banking has the potential to fundamentally reshape the economy by reducing informality and expanding access to finance.

In short, Pakistan’s long-term resilience will depend on its ability to combine macroeconomic discipline with structural reforms that increase productivity and global competitiveness.

And above all, and perhaps most importantly, our foreign policy shall continue to remain non-aligned and inclusive.   We’ve done an absolutely brilliant job on the foreign policy front in terms of establishing ourselves as the center of engagement for the resolution of regional issues, via facilitating meaningful dialogue, with international and regional countries and we must built on this standing to translate it into more impactful economic benefits in the form of investment and favourable trade terms for the Country.

The Bank of Punjab has seen a remarkable turnaround under your leadership. Please tell us briefly how this was achieved.

The transformation of the Bank of Punjab has been the result of a comprehensive, long-drawn institutional reform program rather than a single initiative.

When we began the turnaround journey, our focus was on strengthening the fundamentals of the bank. This included improving governance standards, strengthening risk management, modernizing technology platforms, and repositioning the bank’s strategic direction to private customers in addition to public entities.

Three areas were particularly critical.

First, we focused on rebuilding the balance sheet and improving asset quality, while strengthening credit discipline and risk frameworks.

Second, we invested heavily in technology and digital capabilities, allowing the bank to improve operational efficiency, customer service, and data-driven decision making.

Third, we adopted a strategy centered around high-impact segments such as agriculture, SMEs, and financial inclusion, areas where banks can create both commercial value and broader economic impact.

As a result, the Bank of Punjab has evolved from a traditional provincial bank into a dynamic growth institution with national relevance, significantly expanding its asset base, profitability, and market position while maintaining strong governance and regulatory compliance.

Most importantly, the transformation was achieved through the collective effort of our employees, management team, and the support of our board , regulators, and above all our main sponsors – The Government of Punjab.

What’s the most proud and satisfying moment for us is that a commercial entity of our magnitude and nature generally achieve a turnaround over decades and when the entity is transitioned from public sector into private sector.   However, in our case, both these myths have been broken as we remained in public sector and accomplished this evolution within a relatively short span of merely 4/5 years.

As Chairman of the PBA, do you think the phenomenal growth in the banking sector can be sustained in the next couple of years? What challenges do you foresee?

Pakistan’s banking sector has demonstrated remarkable resilience over the past several years, supported by strong regulatory oversight and prudent risk management practices.

I believe the sector’s growth can certainly be sustained, but the drivers of that growth will need to evolve, and the traditional players maybe displaced.

Historically, banking sector profitability has been heavily influenced by government borrowing and high-interest rate cycles. Going forward, sustainable growth will increasingly depend on expanding credit to the real economy, particularly in sectors such as SMEs, agriculture, housing, and export-oriented industries, as the back of immaculate customer service to attract and retain cost-effective deposits.

However, there are several challenges that the sector must navigate.  One challenge is macroeconomic volatility, which can impact credit demand and asset quality. Another is the need to accelerate digital transformation while ensuring cyber resilience and financial system stability.  A third challenge is financial inclusion. Despite significant progress, a large portion of Pakistan’s population remains outside the formal financial system. Expanding access to banking services remains both a challenge and a major opportunity.  Lastly, the smooth transition to Islamic banking, in line with the regulatory provisions, will remain the key.  Banking industry is fully committed to meet the transition deadline while closely working with SBP and the government.

Overall, the banking sector remains well-capitalised and robust. With the right policy environment and continued regulatory stability, it pursues to play a pivotal role in supporting Pakistan’s economic growth. Working as one group closely with each other, in the larger interest of the industry and the country as has been witnessed in the recent past in the forms of growth in private sector credit.

Almost doubling SME number of borrowers & lending amount and arresting the declining trend of number of agriculture borrowers, while supporting privatization program of the government through restructuring PIA’s massive debt and liabilities with banks on extremely favorable terms, and promoting businesses, particularly exporting sectors, by restructuring Pakistan’s Rs1.2 trillion circular debt resulting in relief for the industry in energy costs and cutting the interest rate on export refinance scheme by 300bps by directly taking loss on their profitability.

Are you satisfied with the development of human capital in BOP and the banking sector? What can be done to improve this?

Human capital is the most critical asset of any financial institution. While the banking sector in Pakistan has made significant progress in developing professional talent, there is still considerable scope for improvement.

At the Bank of Punjab, we have placed strong emphasis on leadership development, continuous learning, and merit-based career progression. We are investing in structured training programs, digital skill development, and cross-functional exposure to prepare our workforce for the evolving financial landscape.

The nature of banking is changing rapidly due to technology, data analytics, and fintech innovation. This means that the skills required in the industry are also evolving.

Going forward, banks must invest more aggressively in digital skills, data science capabilities, risk management expertise, and customer experience management.

At the sector level, stronger collaboration between banks, universities, and professional institutions can also help develop the next generation of financial professionals.

Ultimately, institutions that invest in talent development will be best positioned to succeed in an increasingly competitive and technology-driven banking environment.

At the end of the day, the biggest peril that the banking industry in Pakistan is confronted with, in my humble opinion, is the skilling and the re-skilling of their employees based on the emerging business imperatives both in terms of emerging digitization and necessity to lend to the frontier/ priority sectors.

BOP has taken the lead in agriculture lending. Please tell us how this has been made accessible to small farmers. How does this product work and what percentage is it in your lending portfolio?

Agriculture remains the backbone of Pakistan’s economy, yet historically small farmers have faced significant barriers in accessing formal credit.

At the Bank of Punjab, we have worked closely with the Government of Punjab to design innovative financing models that make credit accessible to small and medium-scale farmers.

One of the most impactful initiatives has been the CM Punjab Kissan Card, which provides farmers with a digital credit facility linked to their land records and agricultural inputs.

Through this system, farmers can access zero interest based financing directly through a card-based platform that allows them to purchase seeds, fertilizers, pesticides, and other inputs from authorized dealers. This reduces documentation barriers, improves transparency, and ensures that credit is used productively.

Similar structure and offering had been done in livestock with offering CM Punjab Maryam Nawaz Livestock Card.

The programme has significantly expanded the reach of formal agricultural financing and has helped bring thousands of farmers into the banking system.

Agriculture financing now represents a meaningful (i.e. 15-20 %) and growing component of the Bank of Punjab’s lending portfolio, reflecting our strategic commitment to supporting rural economic development and improving agricultural productivity.

We’re now working on another pathbreaking initiate with the Government of Punjab to improve the productivity of the small farmers by offering them hi-tech machinery financing directly, on an interest free basis, or on rental basis via service providers.

Any other point you wish to highlight?

One important point I would highlight is the growing importance of sustainable and climate-resilient finance.

Countries like Pakistan are among the most vulnerable to climate change, particularly in sectors such as agriculture and water resources. Financial institutions therefore have an important role to play in supporting investments that improve resilience and sustainability.

At the Bank of Punjab, we are increasingly integrating green financing, climate-aligned lending, and sustainable development initiatives into our broader strategy.

Another important theme is regional economic cooperation. Pakistan’s long-term prosperity will depend on stronger economic connectivity with the Gulf region, Central Asia, and other emerging markets.

The banking sector can play a key role in facilitating trade, investment flows, and financial integration across these regions. Ultimately, banks must move beyond traditional intermediation and position themselves as partners in national economic development, supporting growth, innovation, and inclusion.

Published in Khaleej Times on Monday 23 March 2026