Reserve Bank of India Says ‘No’ to Islamic Banking
After examining the details of Islamic or Sharia banking, Reserve Bank of India (RBI) has decided not to pursue the matter any further. The Reserve Bank in a reply to a query filed under RTI said, “Taking into account, the wider and equal opportunities available to all citizens to access banking and financial services, it has been decided not to pursue the proposal further.”
What’s the basic idea behind Islamic Banking:
Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam. The issue of introduction of the interest-free banking in India was examined by RBI and the government of India, the central bank added.
How this proposal started at RBI:
It all started in late 2008, when a committee on Financial Sector Reforms, headed by former RBI governor Raghuram Rajan, had stressed on the need for a closer look at the issue of interest-free banking in the country.
Photo courtesy of Ken Teegardin.