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Has Islamic Banking found a way in India amid Controversy? Find out!

The Reserve Bank of India (RBI), as part of its plan to boost financial inclusion in the country, has proposed to the government that interest-free banking be introduced in India

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An Islamic Bank. Wikimedia

Sept 20, 2016: Zaheer Chauhan, a public relations consultant in Mumbai, laments the fact that Islamic banking is not available in India.

He uses conventional banking, but he tends to keep his financial activities with the bank to a minimum because as a Muslim, he simply would not be comfortable with certain transactions.

“I’d prefer to use an Islamic bank,” Chauhan says to The National that “One of the major reasons is interest on finance is prohibited [under Islamic law] and Islamic banking would give all the benefits without interest,” mentioned thenational.ae reports.

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“The entire game of interest is holding me back from investing, be it in mutual funds, taking loans for a car, property, consumer durable,” he says.

But it may not be too long before Islamic banking is available in the country, with strides being made towards introducing the alternative system.

The Reserve Bank of India (RBI), as part of its plan to boost financial inclusion in the country, has proposed to the government that interest-free banking be introduced in India, according to the central bank’s recently released annual report.

Reserve Bank of India. Wikimedia
Reserve Bank of India. Wikimedia

This could pave the way for Islamic banking in the country, although strong opposition is coming from some corners.

In Islamic banking, which follows the Sharia, interest is not allowed and should not be paid or collected on deposits and loans. Also, investments should not be made in areas prohibited under Islam, such as alcohol and pork. To earn money, instead of interest, Islamic banks rely on profit-sharing and fees.

“It is observed that some sections of the Indian society have remained financially excluded for religious reasons that preclude them from using banking products with an element of interest,” the RBI report stated. “Towards mainstreaming these excluded sections, it is proposed to explore the modalities of introducing interest-free banking products in India in consultation with the government.”

The State Bank of India was planning to launch a Sharia-compliant mutual fund about two years ago but the plan was scrapped at the last minute. The Sunday Guardian reported that this was because Swamy had intervened to halt the launch.

In a letter to the Indian newspaper, he was reported as having written that Islamic banking would be “politically and economically disastrous for our country”, and he expressed concerns that it could lead to “dubious funds” being brought into the country via Islamic banks.

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But Narendra Modi’s government is eager to advance financial inclusion in the country so that more of the population can come under the formal banking system.

Abhimanyu Sofat at India Infoline, a financial services company with its headquarters in Mumbai, says that Islamic banking does have “big potential” given the number of Muslims in the country, but he thinks that any introduction of Islamic banks could be a lengthy process.

“There could be new legislation that would be required to get this implemented,” he says. There are a couple of mutual fund schemes in India that are Sharia-compliant, although they are marketed as “ethical” funds, mentioned thenational.ae reports.

Previously, the RBI had taken the position that Islamic finance could be offered through non-banking institutions – but should not be offered through banks. This latest move, therefore, marks a significant shift.

India has more than 180 million Muslims, so many believe there is a huge opportunity for Islamic banking to take off in the country.

“The RBI has given its opinion and it’s now up to the government of India to make up its mind,” says H Abdur Raqeeb, the general secretary of the Indian Centre for Islamic Finance.

Middle class and wealthy Muslims in India “reluctantly” use the conventional banking system, because they have no choice, while some Muslims, avoid using banks altogether because the system goes against their religious beliefs, he says.

He says that he expects to see Islamic banking launched in India within the next year following the latest signs that there is a push towards its introduction.

“There is definitely scope and space for Islamic banking in India,” he says. “I don’t think it can be stopped from coming for much longer.”

Kerala’s finance minister, T M Thomas Isaac, last month said the state’s government would launch Islamic banks within the next two years, Indian newspaper The Hindu reported. He said that Islamic banking offered an alternative system to the capitalist structure that triggered the global economic crisis of 2008, according to the newspaper.

Mr Raqeeb insists that Islamic banking is not necessarily only for Muslims and it could help to bring more Indians from poorer backgrounds into the banking system. Farmers could be among those to benefit, he says, with farmer suicides in India often linked to crippling high-interest loans that they have taken out.

“The marginalized people and the minorities are excluded from banking, so we think if this alternative system comes, it will be inclusive.”

There have been other recent steps towards Islamic banking in India. Saudi Arabia’s Islamic Development Bank this year announced plans to launch its operations in Ahmedabad in Gujarat, a state in west India. But there are politicians in the ruling Hindu nationalist Bharatiya Janata Party (BJP) that are vehemently opposed to the introduction of Islamic banking in India.

The most vocal of them is Subramanian Swamy. The BJP politician has long argued fiercely against Islamic banking and does not believe that it has a place in the secular society of India. On Twitter, he once said that “Islamic banking is a failure in Dubai” and in India it would “be conduit for religious conversion – no loan to Hindus on technicalities”.

– by Shayari Dutta of NewsGram. Twitter: @shayari_dutta

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Prince Charles Arrives in New Delhi for two day Visit to Meet PM Narendra Modi

Prince Charles, the Prince of Wales, accompanied by his wife arrived New Delhi for a two-day visit to India to complete their 10-day four-nation tour

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Prince Charles
Prince Charles visits India with his wife for two days. Wikimedia.

New Delhi, Nov 9: Prince Charles, the Prince of Wales, accompanied by his wife, the Duchess of Cornwall, Camilla Parker-Bowles, arrived New Delhi on Wednesday on a two-day visit to India at the final leg of their 10-day four-nation tour that also took them to Singapore, Malaysia and Brunei.

“Their Royal Highnesses Prince of Wales and the Duchess of Cornwall arrive,” the British High Commission in India tweeted.

Prince Charles is scheduled to meet Prime Minister Narendra Modi on Wednesday evening and discuss a wide range of issues, including that of the Commonwealth Heads of Government Meeting (CHOGM) which will take place in April 2018 in the UK.

Prince Charles
Prince Charles arrives in India with his wife. IANS.

Ahead of the royal couple’s arrival, External Affairs Ministry spokesperson Raveesh Kumar said climate change, Sustainable Development Goals (SDGs), economic cooperation, and other bilateral issues would also come up for discussion.

Bilateral trade between India and Britain stands at $12.19 billion. India is the third largest investor in Britain and the second largest international job creator in that country.

Britain is the third largest inward investor in India, with a cumulative equity investment of $24.37 billion for the period April 2000-June 2017

The Indian diaspora in UK is one of the largest ethnic minority communities in the country, with the 2011 census recording approximately 1.5 million people of Indian origin equating to almost 1.8 percent of the population and contributing 6 per cent of the country’s GDP.

This will be Prince Charles ‘s ninth visit to India. He had earlier visited India in 1975, 1980, 1991, 1992, 2002, 2006, 2010 and 2013. (IANS)

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Editorial Freedom Should be used Wisely in Public Interest says PM Narendra Modi to Media

Prime Minster Narendra Modi on Monday said that editorial freedom should be used in public interest and urged the newspapers to devote space to increase awareness about climate change

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PM Narendra Modi speaks about Editorial Freedom. Wikimedia

Chennai, Nov 6: Prime Minster Narendra Modi on Monday said that editorial freedom should be used in public interest and urged the newspapers to devote space to increase awareness about climate change.

Speaking at the 75th anniversary celebrations of Tamil newspaper Daily Thanthi at the Madras University Centenary Auditorium, Modi said lot of things happen around the world and the editors decide what is important to be published in their newspapers.

He said: “Editorial freedom should be used wisely and in public interest.”

Pointing out the natural calamities occurring around the world at regular intervals, PM Modi urged newspapers to allocate space to increase awareness about climate change.

Narendra Modi said the freedom to write does not in anyway reduce the importance to be accurate and correct, adding that though media outlets may be owned by the private sector, they serve a public purpose, have much social accountability and their conduct should be above board.

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Media must use editorial freedom with public interest, says PM Modi. Wikimedia.

He said technological advancement enables citizens to compare, discuss and analyse the credibility of news and the media should take extra caution to maintain its credibility.

According to him, reform in media can come from within and through introspection.

Observing most of the media discourse revolves around politics, Modi said the nation is made of over a billion people and the media should focus on the people and their achievements.

Citing the spread of mobile phones, Modi said citizen reporting is important in showcasing individual achievements and also helping in the aftermath of natural disasters.

PM Narendra Modi also released a souvenir.

Governor Banwarilal Purohit, Defence Minister Nirmala Sitharaman, Union Minister of State for Finance and Shipping Pon Radhakrishnan, Chief Minister K. Palaniswami and his deputy O.Pannerselvam also participated in the function.

Paying encomiums to the founder of Daily Thanthi S.P. Adithanar and his son Sivanthi Adithan, Palaniswami said the daily would certainly see centenary celebrations.

Leaders of several political parties, law makers, industrialists, movie actors and diplomats attended the function.

Earlier on his arrival PM Modi was received by Purohit, Palaniswami and others at the airport.

From the airport Modi reached the INS Adyar naval base here in a helicopter.

At INS Adyar, Modi had a meeting with Palaniswami and discussed about the rain and relief situation in Chennai and neighbouring districts. (IANS)

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India will become High-Middle Income Country by 2047, says World Bank CEO

World Bank CEO Kristalina Georgieva on Saturday said she has no doubt that India will be a high-middle income country by 2047.

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World Bank CEO Kristalina Georgieva. IANS.

New Delhi, Nov 4: Lauding India’s increasing per capita income, World Bank CEO Kristalina Georgieva on Saturday said she has no doubt that India will be a high-middle income country by 2047 when it completes its centenary year of independence.

“In the last three decades, India’s per capita income has quadrupled. I have no doubt India when it hits its century of independence in 2047, will be a high-middle income country,” Georgieva said while addressing India’s Business Reforms conference at Pravasi Bharatiya Kendra here.

Georgieva praised India for its sudden jump of 30 ranks in 2017, the biggest leap ever, in the history of the ease of doing business.

World Bank CEO
Indian Prime Minister Narendra Modi. Wikimedia.

“We are here to celebrate a very impressive achievement. In 15 years of the history of the ease of doing business, such a jump of 30-ranks in one year is very rare. In cricket, I understand that hitting a century is a big milestone.”

ALSO READ: Doing business in India is easier now!

She hailed Prime Minister Narendra Modi for his “high-level ownership” efforts and “championship of reforms” that led to achieve India such a ranking in ease of doing business.

Reminding Guru Nanak Dev’s preachings, the World Bank CEO said: “Today is also the anniversary of Guru Nanak which reminds me of his words that whatever seed is sown, the plant will grow thus.” (IANS)