Eye on 2014, UPA warms to Islamic banking - The New Indian Express

Eye on 2014, UPA warms to Islamic banking

Published: 20th Oct 2013 06:48:32 AM

Firm in its belief that minorities will fetch it majority in 2014, a section of the Congress-led UPA is pulling all stops to introduce Sharia-based Islamic Banking in the country.

Islamic banking complies with Islamic law (Sharia) and is guided by the religion’s brand of economics that prohibits collection and payment of interest. It disallows investments in businesses considered unlawful, or haraam, like selling alcohol, pork or pornography. As Islam forbids simply lending out money at interest, rules on transactions have been created to prevent it. The basic principle of Islamic Banking is based on risk-sharing which is a component of trade rather than risk-transfer which is seen in conventional banking. It introduces concepts such as profit sharing, safekeeping, joint venture, cost plus, and leasing.

The idea of introducing Islamic Banking was first mooted by RBI governor Raghuram Rajan, now the UPA’s poster boy of economic revival, back in 2008. With the MIT-educated former IMF economist now in the driver’s seat, Islamic Banking lobbyists within the government are making deft moves to follow through that recommendation.

Though the matter comes under the Finance Ministry’s ambit, spearheading the lobbyists is K Rehman Khan, the Minister for Minority Affairs. A staunch supporter of Islamic Banking, Khan met Rajan immediately after he took over as RBI boss last month. “The new RBI chief was very positive on the subject’’ said a source in the ministry.

According to the source, the RBI chief made it clear to the minister that the decision was more political than financial. The ministry, thus, is preparing a blueprint explaining the positive impact Islamic Banking could have on the Indian economy, for circulation among stakeholders.

“It is natural for others to have apprehensions about an initiative called Islamic Banking. Our effort would be allay these fears,” said an official assigned the task of implementing it. Though the PM, Planning Commission boss Montek Singh Ahluwalia  and Finance Minister P Chidambaram are in favour of the system, others in the government need convincing.

In 2008, Rajan as head of the High Level Committee on Financial Sector Reforms had recommended interest free finance should be introduced in the main banking sector for growth with inclusion. “The non-availability of interest-free banking products (where return to investor is tied to the bearing of risk, in accordance with principles of that faith) results in some Indians, including economically disadvantaged, unable to access banking products and services due to reasons of faith. This non-availability denies India access to savings from other countries in the region,” he had noted.

Read also: RBI supports Islamic banking  

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Comments(12)

Read Third para, first line:: The idea of introducing Islamic Banking was first mooted by RBI governor Raghuram Rajan...So is this guy a Brahmin-Muslim? And for this the SoB went to MIT! WTF? Welcome to India, the Land of Sharia Banking and next Sharia Law.

So if one will go a bank in India in 2014. It will start with the greetings: “As-salaamu alaykum". " Welcome to State Bank of Sharia India" or " Welcome to Bank of Sharia India", or " Welcome to Sharia Indian Overseas Bank". Once you are done with the transaction, they will say " Khuda Hafeez". For those people wearing Bags or Hijab, there will be special greetings in Arabic. Way to go India in 2014. It will be a new era

Dear brother, pls dont turn blind towards the truth. Introducing Islamic banking system is not meant to islamize the country. It is only to accept the participatory banking system which is derived from the Islamic financial system. The solution for your worries is already mentioned in the news report itself. Pls try to learn

Mr. Gafoor, you must first remember India is a Secular Country having 80% Hindus and also other major religions. As Indians we are and must be Secular and therefore there should not be any Religious Idealogy or Practice in any public institution or workplace.The Role of Govt is to administer and not impart religion on anyone or in any form. India does not need Sharia Banking or Hindutva Banking. Sharia Banking is for Islamic countries, and not for India. Mr. Gafoor if Muslims like Islamic Banking then you can have it in Pakistan or Saudi Arabia or similar Muslim majority countries. Not in India. Noboby is forcing anyone to stay in India Sir. If you like Sharia stuff, you are most welcome to move out. Please remember Muslims in India have more freedom than in Pakistan. That is the beauty of our secular country. The Congress is trying to divide our country on religious lines by all means, and that will not work. In 2014 Elections the Congress will be routed.

Dear Friend! Islamic banking is a concept based on economic principles of Islam. That is why it carries that nomenclature. It replaces interest by Profit or Loss in all money related transactions. It aims to work for economic development through transparent ethics-based means where opportunity is for one and all. Experienced bankers operate these banks and all local laws are followed. Doors of such units are open for all faiths. More than 75 countries have so far introduced it. Malaysia is a major hub. Many Non-muslims as Managers, customers are attached to these institutions. Once introduced in our country the farm sector suicides, huge NPAs in banks, corruption; (to name a few) a direct fallout of the present day banking practices can easily be brought under control in our country. The concept needs to be viewed in its contents and not through its name over the board.

Russia has clearly shown the door to Islamic banking, this scheme is nothing but pleasing the minority, ahead of Parliamentary elections, let sharia principles be introduced in Pakistan, or other minority states, not in India, never.

Hats of to you sir. Let me add something to this Congress Party Poll GLimmick. If Congress party sole purpose is to please muslims then what the hell Hindus are here meant for? Let the muslims fall prey to it & we the hindus don't even vote a single infavour of Congress. This is the reason why party like Congress always do things to please muslims as because they don't need to please us, the Hindus

This is a pointless decision and like Rajan said to the Minority affairs minister, just a political gimmick. From what I understand Islamic laws should not be taken out of context but the history behind these should also be considered. The ban on interest was imposed in the era of moneylenders who exploited people by charging huge amounts. In the modern era these are extinct and most Muslims in India today have no problem with conventional banks which charge reasonable interest rates.

Mr. gautam. Muslims have not choice other than to accept today's banking system which is based on interest. As far as money lenders who exploited people, what are today's banks doing then? Isn't it a burden on a person to pay more than he/she has borrowed. The interest rate keeps on changing and is based is value of currency at that point of time. This means the person can end up paying more than what they had to pay (even with interest included). Just because it is called Islamic Banking people assume that it is anti-hindus or anti-christians or anti-any non islamic faith. please first of all read about it in detail and then only make such comments. Most of those who are making comments against this banking system are those who haven't read about it and are making foolish assumptions.

I recommend Kapil Sibal to introduce Sharya courts in India before 2014 elections. Simultaneously PC can introduce Jazziya Tax to augment sagging government revenue and set India on its noble path to greater glory of yester years!

Congress today is the Islamic party, with some traitor Hindus collaborating with this organization for their personal interests. All non-muslims must realise this Congress is the mother of enemy of India and all non-muslims. Vote out this anti-national Congress and then banned it.

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