Islamic Banking has No Relevance in India: Union Finance Ministry

Wednesday, December 14, 2016

The Union Finance Ministry said Friday that Islamic banking was not relevant any more in achieving the objectives of financial inclusion as the government has already introduced programmes like Jan Dhan Yojana and Suraksha Bima Yojna for all citizens towards that end.

In a written reply to the Lok Sabha, Minister of State for Finance Santosh Kumar Gangwar also said various legal changes would become necessary if even limited products were to be introduced under Islamic banking.

“Reserve Bank of India (RBI) had set up an inter-departmental group on Islamic Banking. Entire exercise was aimed at promoting financial inclusion, accessing huge market potential to attract finance from Gulf countries for infrastructure development. However, on consideration of inter-departmental group report, it is observed that even to introduce limited products, various legal changes would be required”, Gangwar said in the Lok Sabha on Friday.

“Moreover”, he added, “The objectives of financial inclusion for which Islamic Banking was explored by RBI has no relevance, as Government has already introduced other means of financial inclusion for all citizens like Pradhan Mantri Jan Dhan Yojna, Pradhan Mantri Suraksha Bima Yojna, Pradhan Mantri Jeevan Jyoti Bima Yojna, Pradhan Mantri Mudra Yojna etc.”

Source: ummid (link opens in a new window)

financial inclusion, Islamic finance