High rates of bank interest

There is something about Pakistani Muslims I'll never understand. I know some who indulge in gambling throughout the night, drink like fish and have mistresses, yet when bank interest is mentioned, they react like their mothers have been raped. "Interest is haram (forbidden)!" they scream. Even that metallurgist Abdul Qadeer Khan, incorrectly called the father of the Islamic bomb, wrote an article on the subject. The fact is, what has been banned is not interest, but "riba", a term which has been defined as "excess" (usury). The Holy Koran says, ""Oh you who believe! Devour not usury doubled and multiplied; but fear Allah that you may prosper." Clearly, bank interest (in which a depositor gets at the most ten percent per year) is not "riba". This is the view of many scholars (like the late Khalid Ishaq), as well as Al-Azhar University, which has also declared that earning interest on bank deposits is permissible. But of course Pakistani Muslims, who think that Islam was revealed on the day the country was born (14 August 1947), stoutly maintain that any rate of interest (even as low as half a percent) is "haram" and invites the wrath of the Almighty.
So, when I read that the Bank of Japan has lowered the interest rate to between zero and half a percent (to curb inflation), I wondered how banks in that country can survive. It turned out that the zero or very low interest rate is for amounts loaned to the government or big corporations, but even then the interest charged from ordinary borrowers is not very high. So, if a low rate of interest can be imposed in Japan (and I've heard that even in Western countries the interest rate is as low as three percent), why not in Pakistan? Is it because there is too much corruption involved, or because bank executives are paid very high salaries?