WORKING HOURS

9:00am to 06:30pm

CALL US

+91 11 29945946

MAIL US

info@icif.in

CANT SHARE DETAILS OF GOVT RESPONSE ON SHARIA BANKING: RBI

CANT SHARE DETAILS OF GOVT RESPONSE ON SHARIA BANKING: RBI

 

New Delhi, Feb 27 (PTI) The response given by the Finance Ministry on an RBI report about the introduction of Sharia banking in India cannot be disclosed, the central bank has said.

The Reserve Bank of India (RBI) was asked to give the copy of the letter sent to it by the ministry on the recommendation of its Inter Departmental Group (IDG) regarding Islamic banking.

The central bank had sought response from the Department of Financial Services (DFS) under the finance minister whether their letter can be disclosed under the Right to Information (RTI) Act.

 

"In this regard we have been advised by the DFS, Government of India that the letter is exempt under Section 8 (1) (c)," the RBI said in response to an RTI application filed by PTI.

The Section bars disclosure of information "which would cause a breach of privilege of Parliament or the state legislature".

Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.

The RBI had earlier proposed opening of "Islamic window" in conventional banks for gradual introduction of Sharia- compliant or interest-free banking in the country.

"In our considered opinion, given the complexities of Islamic finance and various regulatory and supervisory challenges involved in the matter and also due to the fact that Indian banks have no experience in this field, Islamic banking may be introduced in India in a gradual manner.

"Initially, a few simple products which are similar to conventional banking products may be considered for introduction through Islamic window of the conventional banks after necessary notification by the government," the RBI had told the Finance Ministry in a letter, copy of which was received in response to the RTI query.

The central banks proposal is based on examination of legal, technical and regulatory issues regarding feasibility of introducing Islamic banking in India on the basis of recommendation of the IDG.

The RBI had in February last year sent a copy of the IDG to the Finance Ministry.

In late 2008, a committee on Financial Sector Reforms, headed by former RBI Governor Raghuram Rajan, had opined the need for a closer look at the issue of interest-free banking in the country.

"Certain faiths prohibit the use of financial instruments that pay interest. The non-availability of interest-free banking products results in some Indians, including those in the economically disadvantaged strata of society, not being able to access banking products and services due to reasons of faith," the committee had said.

"This non-availability also denies the country access to substantial sources of savings from other countries in the region," it added.

 

indiatoday.intoday.in/story/cant-share-details-of-govt-response-on-sharia-banking-rbi/1/892331.html

Posted Date : 27 February 2017

News Updates

  • ISLAMIC FINANCE FOR FINANCIAL INCLUSION AND INFRASTRUCTURE DEVELOPMENT IN INDIA

    India is on track to overtake the UK to become the world’s fifth-largest economy in 2018, according to data and forecasts from the IMF. Soon it will trail only Germany and the ‘big three’ – the US, China and Japan. However, the Indian banking system is gasping for breath with...

    Read More
  • Islamic Development Bank seeks tie-ups for infrastructure investments

    Islamic Development Bank exploring joint opportunities with other multilateral development banks to invest in India’s infrastructure sector Tue, Jun 26 2018 Utpal Bhaskar Mumbai: Islamic Development Bank Group, one of the largest lenders to Muslim countries, is interested in exploring joint...

    Read More
  • BRINGING ISLAMIC BANKING TO INDIA

          Trying to bring Islamic banking to India   Though Muslims are a minority in India and are generally less affluent than Hindus, in sheer numbers they make India the second largest Muslim nation in the world. Cumulatively, their investment power is tremendous and rep...

    Read More
  • IMF ACCEPTS FINANCIAL ISLAM

      Criminal for our education sector to ignore it any longer Dr Mehboob Makhdoomi Srinagar | Posted : Jun 3 2018 The International Monetary Fund (IMF) has finally incorporated Islamic Finance into its financial sector assessments beginning January 1, 2019, calling Islamic Finance ...

    Read More
  • Islamic Finance Muslims in India develop mutual health insurance scheme as alternative to takaful

    Islamic finance pioneers and like-minded community leaders in India have come together to introduce an alternative product to formal takaful, which doesn’t exist in the country. A not-for-profit health assurance scheme, called Uplift Mutuals Biradaree, started in April this year at two of M...

    Read More
  • INT’L ZAKAT CONFERENCE KERALA CATERS HOPE FOR CREATIVE ZAKAT SYSTEM IN INDIA

    By HABEEB RAHMAN CP The International Zakat Conference, organised by Baithuzzakath Kerala, concludes in Cochin with the new hope for the effective zakat management in the country. More than 250 high-profile delegates from various parts of the country and other nations participated in the conference...

    Read More
  • ZAKAT THE SOURCE OF SOCIAL UPLIFTMENT AND ECONOMIC EMPOWERMENT

    Dr. Rahmatullah Abdul Ahad dwells upon how Zakat can be a source of social upliftment and economic empowerment. Poverty, which indicates the absence of material means, is rampant in all the states of India irrespective of caste and clan wise composition of the society. The consequence is sufferings...

    Read More