Murshid Quli Khan was the de facto Nawab of Bengal. He was probably born in 1665.
Murshid Quli Khan, who hailed from Burhanpur, was by birth a Brahmin. During his early years he was sold by an anonymous merchant of Isfahan to Haji Shafi Isfahani. Possibly around this time he was converted to Islam and his master named him Muhammad Hadi. Later on, Mughal Emperor Aurangzeb gave him the title of “Murshid Quli Khan”.
Together, Murshid Quli Khan and his master had spent some time in Persia before returning to India. After his master’s death, Murshid Quli Khan worked in the revenue department in Berar and, soon, through proficiency in this field, earned the recognition of Aurangzeb.
In 1698 he was made the Diwan of Hyderabad. And success there raised him to the posts of Faujdar of Murshidabad and the Diwan of Bengal in 1700.
He earned his reputation by thwarting the attempt of Azim-ush-Shan, the subahdar of the province, to appropriate the revenue of Bengal for his personal gain.
In the Mughal provinces, it may be noted, the post of subahdar or nazim and the diwan was never amalgamated in one person. Abuse of power was checked by the Emperor by keeping the men divided, each post serving as a check on the other. The nazim was responsible for the maintenance of law and order, the command of the armed forces and the administration of criminal justice; while the diwan was responsible for finance and taxation and administration of civil justice.
In 1701, Hadi became the faujdar of Murshidabad, Bardhaman and Midnapore. Aurangazeb, then in deep financial strain in the war with the Marathas, was overwhelmingly pleased when Hadi remitted one crore of rupees from the province. As a reward for his services, in 1702, Aurangzeb gave him the title Murshid Quli Khan.
In 1703, Murshid Quli Khan was made the subahdar of Orissa and in 1704 to the post of Diwan of Bihar. The same year Murshid Quli Khan transferred his capital from Dhaka to Murshidabad. For his services as diwan, remitting punctually revenue to the capital, Murshid Quli was by stages raised to the position of deputy subahdar of Bengal in 1713 and to the post of subahdar in 1717. There was thus a distinct deviation from the Mughal practice when Murshid Quli Khan commanded both the posts of diwan and subahdar. He took the title of Alauddin Zafar Khan Bahadur and virtually acquired for his province a semi-independent status. Murshid Quli did not challenge the sovereignty of the Emperor and also did not stop the remission of revenue to the capital, although the dignity of the empire had been seriously damaged by then.
Murshid Quli Khan became independent Nawab for all practical purposes, but he did not challenge the supremacy of Mughal Emperor. Within the province the de facto Nawab reigned supreme and his tenure as the Diwan and Subahdar saw the development of an elaborated revenue administration.
Murshid Quli Khan died on 30th June, 1727.