Although the bulk of his trade finance career was rooted in paper-based examination and systems, Iqbal Karmally has resolutely embraced digitalization and strives to equip those he trains with sound professional habits essential for today and vital for the future.
How did you first find your way into trade finance? Was it planned, accidental, or somewhere in between?
Somewhere in between — as it is for most people in this field, I think. I entered banking without a specific plan to end up in trade finance. But early in my career, when I first handled a documentary credit, something clicked. Here was a single transaction that brought together contract law, shipping, insurance, foreign exchange, and cross-border risk — all governed by an elegant set of international rules. I realised that trade finance isn’t just a banking product; it’s the machinery that makes global commerce possible between parties separated by oceans, legal systems, and languages who may never meet face to face.
What strikes me now, looking back over the arc of my career, is how dramatically the landscape has shifted. When I started, trade finance was entirely paper-based — physical documents moving through courier pouches, examined by hand under fluorescent lights. Today we are navigating a transition toward electronic bills of lading, digital trade documents, blockchain-enabled platforms, and the legal frameworks that underpin them. The intellectual richness that first drew me in hasn’t diminished — if anything, digitalization has added entirely new dimensions to it.
What made you stay — and what keeps you motivated or engaged over time?
The depth and the constant evolution. I spent nearly twenty years as Head of Trade Finance at Sharjah Islamic Bank in the UAE and one thing I never experienced was monotony. Every transaction carried a different commodity, a different country risk profile, a different documentary puzzle to solve. The work demanded that you stay current — with ICC rules, [Accounting and Auditing Organization for Islamic Financial Institutions] Sharia’h Standards, shipping practice, sanctions regimes — and constantly learning.
Today, the pace of change has accelerated enormously. The ICC Digital Standards Initiative, the MLETR framework, the emergence of electronic transferable records — trade finance is undergoing a fundamental transformation in how documents are created, transmitted, examined, and stored. Staying engaged means staying at the frontier of these developments, and that is genuinely exciting.
What also keeps me motivated is passing it forward. Since returning to Pakistan after retirement two years ago, I’ve been actively engaged in capacity building — delivering training programmes through [Pakistan’s National Institute of Banking and Finance] and local financial institutions. When a participant who struggled with the logic of UCP 600 Article 14 on Monday is confidently examining documents by Friday and also understands why eUCP 2.1 matters for their future, that’s a tangible outcome. Expertise only has value if it’s shared, and in a period of such rapid change, the obligation to share feels even more pressing.
What part of your work still energizes or inspires you?
Three things and they’re increasingly interconnected.
First, working at the intersection of conventional trade finance and Islamic finance. These are two domains with fundamentally different philosophical foundations but deeply overlapping practical applications. The challenge of structuring Shariah-compliant trade products that are commercially robust, jurisprudentially sound, and operationally workable is endlessly stimulating.
Second, the deep dive into the digitalization agenda. Trade finance has been one of the last bastions of paper-based processing in financial services, and the shift toward electronic documents and legal recognition of electronic transferable records under MLETR is transforming the very nature of document examination. How do you examine a document that no longer physically exists? How do banks satisfy themselves on authenticity when there is no original signature, ink, nor paper? This evolution requires us to rethink practices that have remained essentially unchanged for decades and I find that really exciting.
Third, the dynamics of LC practice. I was fortunate to serve on the ICC Drafting Group for the revision of ISBP 745 which gave me firsthand appreciation of how international standards shape banking practice across dozens of jurisdictions. That experience sharpened my vision of gaps between how rules are written and how they’re applied. And today, digitalization is creating new gaps in practice faster than standards can fill them.
If you could change one thing about the industry or how we work, what would it be?
The distance between the rules as written and the rules as genuinely understood. Also, the widening gap between where digital trade is heading and where most practitioners currently stand.
We’re fortunate to have world-class rules and standards, but too often practitioners engage with them superficially. Documents get examined mechanically and boxes get ticked, but the commercial and legal reasoning behind each provision remains unexplored. The result is that when a non-standard situation arises — as it often does — people lack the analytical foundation to handle it confidently.
With digitalization in the picture, the challenge deepens considerably. Many banks, particularly in developing markets, are still training their teams exclusively on paper-based document examination while the world is moving toward AI-assisted examination. The MLETR is being adopted by an increasing number of jurisdictions and the ICC Digital Standards Initiative is actively working to align trade rules with digital reality. Yet trade finance officers in many markets have had no meaningful exposure to any of this.
On the Islamic finance side, the problem takes a different but equally concerning form. Products are sometimes structured to satisfy formal Shariah requirements at the surface level while the underlying economic substance – that is, the real pattern of cash flows and the actual distribution of risk and reward between the parties, viewed independently of how the contract is labelled – drifts away from the principles those requirements are meant to protect.
What I would change is the industry’s approach to education itself. We need deeper, forward-looking education that advances practitioners who understand the rules, the reasoning behind them, and how both must evolve as trade finance moves from paper to digital. The future is now and belongs to professionals who can examine an electronic document with the same rigor and understanding that the best examiners brought to a paper original.
Tell us about a specific experience — a deal, project, challenge, or case — that taught you an important lesson. What was the lesson and how did it shape your approach?
Early in my career in the UAE, I was involved in an LC transaction where a presentation contained what appeared to be a minor inconsistency in the transport document. The experienced but process-driven document examiner missed the substantive implication because the document’s format looked familiar. The issuing bank subsequently rejected the documents — but critically, the rejection came beyond UCP’s five-banking-day examination period. What should have been a straightforward discrepancy became a protracted dispute involving the applicant, beneficiary, and two banks across jurisdictions, with real financial exposure on the line.
The lesson I took from that has stayed with me ever since: document examination is not a clerical function; it is an analytical discipline. You must understand what each document represents in the context of the underlying trade, not just whether it looks right on the surface.
This has become even more relevant in the context of digitalization. When documents were paper-based, examiners could at least rely on certain physical cues — watermarks, original signatures, the feel of a multi-part document set. In a digital environment, those cues don’t exist. Examining an electronic bill of lading or a digitally-signed certificate of origin demands a different kind of rigor — an understanding of what constitutes a valid electronic record, how authentication works, what the governing legal framework permits, and whether the digital platform itself meets the standards required. The analytical foundation matters more, not less, when the document is no longer something you can hold in your hand.
I carry this into every training session I deliver. I always tell participants: before you apply the rule, understand the reason the rule exists — and prepare yourselves for a world where the documents you examine may look nothing like the ones your predecessors examined, even though the underlying commercial principles remain the same.
What advice would you offer to someone just starting their career in this field today?
Go to the source. Read the ICC rules and standards yourself. Don’t rely on summaries, PowerPoint slides, or secondhand explanations — sit with the original text and wrestle with it. That effort builds a foundation that no shortcut can replicate.
Second, cultivate the habit of asking why. Every rule exists because something went wrong in the past. When you understand the problem a rule was designed to solve, you can apply it intelligently in situations the drafters didn’t anticipate.
Third, resist the temptation to specialise too narrowly, too early. Trade finance lives at the intersection of banking, commercial law, logistics, marine insurance, foreign exchange, and regulation. The practitioners who add the most value are the ones who understand the full ecosystem, not just their own corner of it.
Fourth — and this is non-negotiable for anyone entering the field today — embrace digitalization. Understand what MLETR is and why it matters. Familiarise yourself with electronic bills of lading platforms and what legal recognition they carry. Learn how digital trade documents are created, authenticated, and examined. Study eUCP 2.1 alongside UCP 600 — they are no longer separate tracks but converging ones. The trade finance professional of tomorrow will need to be as comfortable examining a document on a screen rendered by a digital platform as their predecessors were examining one on paper. Those who build this capability early will have an enormous advantage.
And if you’re operating in a market where Islamic finance plays a role, invest serious time in understanding Shariah principles at a structural level. The demand for professionals who can work competently across conventional trade finance, Islamic trade finance, and digital trade is growing far faster than the supply.
What do you do outside of work that people might be surprised to learn?
People are often surprised to learn that a significant portion of my time and energy outside of paid engagements is devoted to something I do entirely without charge — mentoring and coaching trade finance professionals who are preparing for the CDCS and CSDG examinations. These designations are widely regarded as the gold standard qualifications in this field and preparing for them is a serious undertaking. I work with candidates individually and in groups, helping them build the depth and breadth of knowledge that the examinations demand.
Michael is the CEO of IIBLP and the Publisher of DCW. Michael has over 25 years of professional experience including 15 in trade finance and compliance, and has written and spoken extensively.
