Idea of Islamic Banking by RBI rejected by Modi Government, “Islamic Window” in Conventional Banks is now a Myth

Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam

Reserve Bank of India. VOA

New Delhi, Dec 11, 2016: The idea of Islamic banking by RBI has been rejected by the Finance Ministry since the Central Government has already introduced several inclusive schemes for the benefit of the citizens. Schemes such as Jan Dhan Yojana and Suraksha Bima Yojana are some of those.

It was last month, in November when the Reserve Bank of India (RBI) proposed the introduction of “Islamic window” in the conventional banks for “gradual” start of Sharia-compliant or interest-free banking in the country.

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Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.

In the Lok Sabha, a statement was made by Minister of State for Finance Santosh Kumar Gangwar which suggested that the introduction of Islamic Banking in India will bring with it numerous legal hurdles.

It was the committee headed by Raghuram Rajan (who later became the RBI Governor) and in 2008, he submitted a report to the UPA Government that did not mention anything about the Sharia Banking but suggested a need of having an interest-free model in India.

Presently, the idea of Islamic Banking is rejected by an inter-departmental group set up by Reserve Bank of India (RBI).

– prepared by NewsGram Team