India’s Government Warms up to Islamic Banking
With full faith that the minorities will get it a majority in 2014, India’s Congress-led UPA government is pulling out all stops to introduce the Shari’ah-based Islamic Banking (IB) in the country’s banking system.
Islamic Banking complies with Islamic law (Shari’ah) and is guided by Islamic economics. Islamic law prohibits the collection and payment of interest. It also disallows investing in businesses that are considered unlawful, or ‘haraam’, like selling alcohol, pork or pornography.
RBI governor Raghuram Rajan, who is now the UPA’s poster boy of economic revival, had recommended the introduction of IB in 2008. Islamic Banking advocates within the government are making deft moves to follow through since Rajan is now in the driving seat. Though the matter comes under the Finance Ministry’s ambit.
K Rehman Khan, Minister for Minority Affairs, is the driving force behind Shari’ah-based economics.
Khan has been a staunch supporter of Islamic Banking ever since he became the minorities minister and had met Rajan immediately after he took over as the RBI chief.
“The new RBI chief was very positive on the subject,” said a source in the Minority Affairs Ministry.
Source: New Indian Express
