Source: Radiance Weekly
India may be closer to allowing Islamic banking than ever before with the central bank and the finance ministry discussing ways in which rules need to be changed to allow the interest-free practice that’s compatible with Shariah law. Demands by Muslim groups over the past few decades to allow the method have thus far been stalled because of concerns over incompatibility and fears that it could be used as a conduit for terror funding. RBI governor D. Subbarao said last week that the apex bank was holding discussions with the government on how existing laws can be restructured or amended “so that they are in conformity with Islamic banking”. The finance ministry recently wrote to RBI asking it to examine the possibility of making the interest-free model part of India’s 75 billion banking system.
Categories: Asia, Economy, India, Sharia Compliant Banking & Finance