Muslims from across Ahmedabad assembled at the Gujarat Chamber of Commerce and Industry (GCCI) to deliberate on the need to have Shariah-compliant banking to harness community finances, a demand that is fast growing. Experts from across the religious spectrum converged at the Conference on Islamic Banking & Microfinance in India under the aegis of Jamaat-e-Islami Hind. Islamic banking, a window within conventional banking system, helps invest in products that comply with the Islam which prohibits earning of interest.
Shariah does not allow investment in banks as earning of interest or paying interest on loan is considered un-Islamic. It also does not allow investment in companies that invest in equities considered haram or into speculation or gambling. “However, Shariah allows profit sharing and investment in country’s infrastructure,” H Abdur Raqeeb, general secretary, Central Advisory Council of Jamaat-e-Islami Hind, told Mirror. Raqeeb said the visit by the Prime Minister to Dubai recently was a big trigger.
“The Prime Minister sought investment in India at a packed meeting but the business community conveyed it can invest but India needs to have a Shariah- compliant system. I know that businessmen in Gulf are eager to invest in India, they are already investing in China through Hong Kong. The oil industry from where the money comes from is on the decline at present and there are $3 trillion that they can invest globally. India has an opportunity to get a huge slice of these funds,” Raqeeb said. He said the biggest hurdle to Islamic Banking is that it needs legislative amendment and go through the Parliament.
“What is encouraging is the December 2015 report of the RBI Committee on Mediumterm Path on Financial Inclusion that stresses on financial inclusiveness to include hitherto underserved section of societies to become active stakeholders in economic progress. Several terms such as sharing of risks and interest-free banking and sharing of profits and losses rather than charging interest are the tenets of Islamic banking,” he stressed.
The committee had recommended that commercial banks be enabled to open specialised interestfree windows with simple products. SM Wasiullah, manager of Shariah investment firm, said, “We have researched 7,000 companies on the stock exchange and 1,100 are found to be Shariah compliant. If authorities are made aware of this sort of investment’s true potential, it can bring huge opportunities to India.”