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Dr. Phiroz Poonawalla
Dr. Phiroz Poonawalla


Dr. Phiroze Poonawala: The Islamic Economist who means Business, that too without Interest

His Mission: If you are servicing debts and paying interest please disassociate from it.

Dr Phiroz Poonawalla

BSc., LLB., DBM., MMS., & PhD in Turnaround Management


Partner, Union Steel Industries, Pune.

Former member of Government of India Committee on modernization of small scale industries & Government of Maharashtra Advisory Committee for raw material & financial assistance.

Trustee & Hon. Treasurer of Empress Botanical Garden, Pune.

Trustee of four public charitable trusts, providing medical & educational help.

President of Holistic Turnaround Management Foundation.  Propagate the concept of debt-free living among entrepreneurs and others through newspaper interviews, lectures and interactions all over India.

Attended 5th Harvard University Forum, International Seminar on Minority Rights in Geneva, spoken at UCLA, California and shared experience with various forums and groups in LA.


Maharashtra State winner of 400 meter hurdles, Pune University Champion in Inter-University level and bronze medal winner in 110 meter hurdles at the 3rd National Games in 1967 at Kottayam.


Wife: Farida

Daughters: Fatema, MBA, Dr. Tasneem M.D. Anaethesia, Alefiya -  Researcher in computer at USC, USA, Dr. Nishreen – Psychologist.


Travelling, reading, gardening.

Address: 23/1 Hadapsar Industrial Estate, PUNE-411 013 (India)
Phone: 020-66021919


Dr. Phiroze Poonawala is a renowned economist who has been busy for over three decades popularising the Islamic concept of business without the involvement of Riba (interest). He has in fact adopted this model himself in his company Union Steel Industries, Pune, which is being successfully run for more than four decades on interest-free basis. As an expert of Islamic economics, he has delivered numerous lectures and talks not only in India but in many parts of the world. His main field of specialisation is in Turnaround Management. 

PinterestDr Poonawala has held a number of important positions. He is a Former member of Government of India Committee on modernization of small scale industries & Government of Maharashtra Advisory Committee for raw material & financial assistance and Trustee & Hon. Treasurer of Empress Botanical Garden, Pune. He is currently President of Holistic Turnaround Management Foundation, which propagates the concept of debt-free living among entrepreneurs and others through newspaper interviews, lectures and interactions all over India. He is also Trustee of four public charitable trusts, providing medical & educational help. He attended 5th Harvard University Forum, International Seminar on Minority Rights in Geneva, spoken at UCLA, California and shared experience with various forums and groups in LA. He is President, Holistic Turnaround Management Foundation, which is a non-profit trust created to propagate the concept of interestlessness among entrepreneurs, businessmen and others all over India and abroad through, workshops, lectures, conferences and dialogues and interactions with Prime Minister’s Office, Planning Commission, State Government, Departments of Universities and Management institutes etc. 


In an interview, he sums up his activities as follows:

“I have been propagating the concept of" la- riba"- interestlessness. This has been going on for more than one decade because of an outcome of our implementing and divorcing interest from our own business activities.
Our company, Union Steel Industries, situated at Hadapsar Industrial Estate, Pune 411 013, employs 40 hands and is specialised in sheet metal deep drawing press parts and components. Few years back, before implementing our ideas, in 1982, we were dependent on bank borrowings. One good day, in 1982 we decided to do away with servicing of debts and stopping any transaction that involved paying interest to banks, financial  institutions-money lenders.
In nearly three years and above time we were able to do away with the entire borrowings to zero.
For more than two decades I have been propagating this concept and motivating established entrepreneurs to do away with bank borrowings and servicing of debts.
Jointly with CII, Mahratta Chamber of Commerce & Industry, Management Institutes and others, have spoken on my hands on experience.
In fact, IIM(A) has prepared a case study on our unit which they treat the Quranic messages of Ayats of Surah Baqrah 275, 276, 278, 279, 280... as a strategy for turnaround.

This idea of spreading the message has taken me to various places including Cyprus, 5th Harvard University Forum on Islamic Finance, different groups in Loss Angele, Iran, Geneva(Switzerland), apart from various places in in India.

I am already in touch with Justice Maulana Muhammad Taqi Usmani, who has delivered the Historic Judgement on Interest in The Supreme Court of Pakistan.”


Dr Poonawala’s expertise and long experience in the development of interest-free business can be gauged from the suggestions he gives for the socioeconomic development. In an article, he lists some major points to promote socio-economic developments which are as follows:

1.  To speed up development entrepreneurship, development programmes should be initiated. This training programme should be carried out for the group at different levels of their education.

2.  Subsidies by State/Central Government or contribution from corporate sectors should be provided to upgrade skills.

3. Measures for development of self confidence should be taken so that men can utilise their available resources optimally.

 4.  Grants/subsidies to SHGs to provide nil interest micro-credit for speedy development of their ‘micro capital’ formation are required.

 5. Windows in existing financial institutes and commercial banks for disbursement of micro-loans to deserving entrepreneurs and emphasis are needed for creation of wealth and self-employment. Such interest-free micro-credit in some way can help prevent exploitation. This would go a long way in defeating the nefarious hold of moneylenders on the life of the poor and have-nots. 


6.  Programmes to upgrade and modernise existing workshops, repairing shops, business undertaken on small and medium scales should be undertaken.

7. In certain areas, manufacturing business activities have become non-existent and hence artisans and craftsmen should be educated to make them aware of changing technological realities and markets, so that corrective actions and measures can be taken well in time.

8. Lectures, seminars and conferences should be arranged to upgrade marketing skills of self-employed persons.

9. In view of the possibility of immense employment opportunities in service industry, special emphasis should be laid on entrepreneur training in this area. Training manuals in regional languages are required to be prepared.

10. Manuals in regional languages are required to inform and motivate to take up small business of grocery, fruit, vegetables or outlets for some products manufactured by bigger companies.

11. Efforts to avoid middle men for the products manufactured by the artisans and craftsmen are required to be taken by the state governments. This can also be done through exhibitions, melas or priority purchase by Government undertakings.

12.  A fresh culture of participation for economic growth and activities is required to be developed, jointly with NGOs, SHGs and regional development boards.  

13. Large population is even unaware of schemes and opportunities available both with State and Central Governments. Dissemination of these activities is important. Mass education on these issues is required.

14.  Establishment of voluntary crops, mentors and provision of platform to share mentor’s experiences are needed.

His main emphasis has been to provide micro-credit or micro-capital venture in order to wean borrowers away from moneylenders and MFI sharks.

A believer in Simple Living and High Thinking, he uses all his waking hours in doing work for his mission. Dr Poonawalla believes in implementing the Quranic injunctions pertaining to riba (interest) and developing Islamic alternatives to the prevailing exploitative economic system and emphasises the universality of Quran, and need of peace, righteousness, forgiveness and brotherhood. 

In short, Dr Poonawala’s mission is: My  mission is  if  you  are  servicing  debts  and  paying  interest  please   disassociate from  it 


His Important Article on Riba

Entrepreneurship without ‘Riba’.

“Those who devour usury
Will not stand except
As stand one whom
The evil one by this touch
Hath driven to madness
That is because they say
“Trade is like usury”
But Allah hath permitted trade
And forbidden usury”…
Surah Baqrah : 275

Al-Quran is opposed to ‘riba’-interest and this because of an inherent exploitative nature existing in its system. Its presence intensifies cancerous exploitation and individuals are deprived of both equity as well as economic justice.  This also clashes with the true spirit of Al- Quran.  Al-Quran prohibits dealing in interest. Thus one has to find ways and means to establish or develop a strategy, which shall promote business enterprise to operate on ‘halal’ lines. Thus one surely has to evolve a strategy to operate ones’ own enterprise, trade commerce and business on shariah approved basis. There are number of alternatives that are suggested by learned scholars but, as of now  limiting this to sharing with individuals who are involved in interest based transactions and motivate them to  plan their approach towards the goal of ‘la-riba’ and. experiment with  alternatives.


The question, no doubt, is how does one run and operate an interest-free financial system?  Where to get funds? Who shall finance?


Allah will deprive
Usury of all blessings
But will give increase
For deeds of charity
Nor He loveth not
Creatures Ungrateful
And wicked….
                          Al-Quran Surah Baqrah 276


Ye who believe
Fear Allah and give up
What remains of your demand
For usury if ye are
Indeed believers……
                       Al-Quran Surah Baqrah 276


Similar questions occur when the Quranic message comes to ones’ notice which one does not apprehend at earlier stages of financial operations.


As the manger of a medium enterprise, manufacturing sheet metal deep drawing press parts and components for large manufacturers in and around my town as well  to defence, automobile and dairy, Quranic injunctions had become a challenge. Initially when idea of becoming interestless enterprise came up, it was not taken seriously. No attempt or serious thought was given to even discuss this seriously.


Being young and enthusiastic entrepreneur, I had kept on adding new items, new parts components and assemblies. Enthusiastic about developing import substitutes and challenging items, borrowing  kept on  escalating and servicing of these debts from banks as well as some times from money lenders had become slowly a regular habit, practice.


Enthusiasm, achievement and R&D jobs requiring lot of high financial inputs were undertaken for development. There was a hope that someday this will bring in large business and a better turn-over. Every now and then this approach in thinking led us to borrow more and more from the banks. Initially with 1600 sq. ft workshop on   an acre land with six workers thus work force multiplied to over fifty workers over a time. More and more recurring liabilities increased every week, month and every year. Overheads, servicing of debts kept the graph moving upwards. Unfortunately we had never heeded to advice nor received any advice from any quarters to do away with borrowing on interest. In our anxiety to progress and growth we kept on resorting to credit with anticipation and kept on resorting to the prevailing banking norms which always talked about debt equity ratio of two to one which means be motivated to borrow under this formula.


Were we walking into a ‘debt-trap’, becoming ‘debtoholics’ in a sense over the years?


Islam is a way of life; Al- Quran has all the solutions to problems that are faced by individuals. So it is bounded duty to search for one. It is very unfortunate that in our eagerness and enthusiasm to achieve worldly gains, we often move away from prescribed path. It is very easy and tempting to borrow from banks and thus we kept away from temptation on financial front. One needs to constantly to be reminded and persuaded to turn around and come back to right path. 


The evils of riba-interest are well known and this can be seen  across the mankind, number of cases where people are mentally, physically and financially ruined as if:


“The evil one by this touch
Hath driven to madness”
                 Al-Quran Surah Baqrah : 275


In an industrial estate where our unit is located, it was observed over a period of time  large number of enterprises became sick, either stagnated,  changed hands, closed down, some had bank attachments, notices, labour problems and many got liquidated.  Entrepreneurs had greyed much before their times.  As far as   am concerned, there were sleepless nights and losing self confidence, stress and tension. A constant fear and threat had engulfed me and often my behaviour was abnormal on account of debt burden.




Inspired by  Quranic revealed message, my mission was not now focused on production, diversification, adding new parts and components, expanding business, but to put a halt to any further bank  borrowings as well as from individuals. Any further borrowing was completely halted and mission tended to get rid of any kind of transactions that involved interest, whether from private money lenders, banks or any other existing sources. Mission was to bring about and make a ‘zero interest enterprise’. This prompted us to take immediate action. Halt to any further expansion and development of any new parts and components.  Doing away with any kind of inventory, whether raw materials or tools. Excess raw materials were disposed off. Semi finished goods were converted into finished articles and dispatched as early as possible. Buyers were given discounts and immediate payment was requested and received. All kinds of scrap, old machineries, dies, punches and all was disposed off. Sealing was put on all kinds of expenditure, traveling, advertisement and initially on consumption of petrol and later in fact all vehicles were disposed off to reach our set goal. This discipline ultimately reduced servicing of debts as well as the bank liabilities and reduced various kinds of spending which was not that essential.


This practical approach led us to minimizing working capital to run manufacturing activities. In continuation to meet our targets, requested some buyers to supply raw materials so to convert it into required parts and components. This helped them too in saving in terms of taxes. Regarding development and making prototypes, decided that henceforth to approach them for advances for development of their prototypes. There was a shift in our business policy.  On account of reliability and quality, our proposal was accommodated. This led to lowering borrowings too and simultaneously led to saving of bank interest. Attempts were made to collect outstanding payments as a prime activity. This entire exercises went on day after day, weeks after week, months after month year after year and with Grace of Allah, within two years our unit become a ‘zero interest enterprise’. Since two decades there has been better productivity, profitability, extra contribution towards charity and growth without fears and tears. Cost saving led to better efficiency, effectiveness and productivity of money and above all a better quality control and a minimum or nil rejection on the floor shop.


There were apprehensions that we may not be able to reach our goal of eliminating the bank borrowing but this was laid to rest permanently at least and a new sense of achievement was experienced. Much more than our new products, import substitutes and other awards and recognitions this was the best trophy we ever received.


A firm commitment to Qur’anic message in any circumstances can be achieved. One does not have to wait to establish an Islamic bank or financial outlets. If individuals have commitments, can easily get rid of bank loans and eliminate an element of interest in their transactions. The Qur’anic message is meant for all the time at all the places and all Muslims. One does not have to wait for a Islamic banking institution to take care but in fact one can give a direction to the community by examples. This should be done by a large number of business community to ultimately make institutions change their approach and policy to suit their customers.


Time is not irretrievable and the biggest gain was saving not only in money but time which was otherwise wasted in visiting banks, preparing documents, submitting statements, tempting the managers and constant visits to the banks as well as their head offices in order to gain more and more financial facilities and credits. The letter addressed to the bank that we would like to ‘freeze’ and pay back what we had borrowed over the years, within a stipulated time came as  a surprise to the bank from a unit which was always begging for more and more  funds.


Having slowly achieved financial self-reliance, the unit became more independent, innovative, creative and above all profitable in terms of its operations. The overheads naturally came down and earlier fear that the business turn-over may reduce were completely unfounded. The entire administration, labour policy became much efficient and effective and even the employees benefited because of better performance in terms of salaries and wages.  Contribution towards taxes to local, state and centre as well as towards Zakat & charity increased and the bottom red line   disappeared permanently. Working strength increased so also floor area and machines. Turn over kept on achieving a better upper graph and above all, all these led to better time management and over all performances which was being neglected.


An extra strength to negotiate as equal with buyers as well as sellers. Weaknesses which were inherent on account of dependent on debts slowly vanished, giving way to challenging development opportunities with this new found strength. Threats from competitors and others disappeared and eliminated. The journey continues. There is growth, better profitability and achievement in business both in this world as well as   one to come.  ‘Debt is the slavery of free’ and ‘debt shortens life’. So well said.


Day in and day out we pray ‘Show us the Straight Path’. The prayers were answered, preventing going astray in business.

He did his BSc, LLB, Diploma in Business Management and Masters in Management Science from Poona University. From the same university, he did his PhD in “Turnaround Management: A Holistic Approach for Small Scale Units”. 




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