High Court Issues Notices; Asks Union Finance Ministry, RBI, J&K Bank, J&K Government To Respond
Srinagar, Publish Date: Mar 20 2018
The High Court on Monday asked Union Finance Ministry, Reserve Bank of India, Jammu and Kashmir Government and Jammu and Kashmir Bank to respond to a Public Interest Litigation petition seeking introduction of Islamic Banking in the state
A division bench of Justices Muhammad Yaqoob Mir and D S Thakur issued notices to the Union Ministry of Finance, RBI, J&K government and J&K Bank asking them to respond to the PIL within four weeks.
ASGI, Tahir Majid Shamsi accepted notice on behalf of the union finance ministry and the RBI, while the government advocate Sheikh Omar waived notice for the state.
Advocate Altaf Haqani represents J&K Peoples Forum, an NGO, which has approached the court through its general secretary M M Shuja.
In the PIL, the Forum seeks directions upon the union finance ministry for issuing necessary notification for the introduction of Sharia complaint windows (Islamic banking) as recommended by Deepak Mohanty Committee as well as in the light of a report of the inter-departmental group of RBI.
The Forum also seeks direction to RBI for taking immediate steps in the constituent banks including the J&K Bank so as to facilitate Shariah compliant windows.
The Forum wants J&K Bank Limited to place before the court entire details of Non Performing Accounts (NPAs) and the steps taken for recovery of the outstanding amount in NPAs, saying the same is public money which cannot be allowed to be misappropriated either by the accountholders or by the management of the bank.
The Forum also seeks direction to J&K Bank to take immediate steps for opening of Shariah compliant windows to accomplish the object of mass level participation in Shariah Banking.
“Chairman J&K Bank, after his take over, publically made announcements one after the other setting agenda for the bank to introduce Islamic Banking,” said the Forum.
The Forum said since the respondents have failed to adhere to the reports of their own committees and expert groups in materializing the recommendations for creation of Shariah Compliant windows, it was left with no other option but to seek intervention of the court.
The petitioner submits that “majority of the citizens in Jammu and Kashmir are Muslims by faith and thus have a constitutional right to enjoy all avenues of development provided the same do not contravene the article of their faith”.
The petitioner has cited the Holy Quran as well as commandments of Prophet Muhammad (SAW) prohibiting interest. “It is of common knowledge that receiving and giving of interest (Riba in Quranic parlance) besides being prohibited for Muslims is widely disliked by other faiths as well,” the Forum said.
“In Hinduism it is said that Brahmana and a Kshatriya shall not lend anything at interest.”
The Forum submitted that even the United Nations has acknowledged the role of Zakat in supporting the Sustainable Development Goals (SDG).
“The United Nations Organization set up an Millennium Development Goals in 2000 and laid down the new Sustainable Development Goals (SDG) blueprint and the successor to the Millennium Development Goals (MDGs) expiring at the end of the year 2015- are composed of 17 goals and 169 targets. The said programme was renewed for another 15 years in 2015. Among other goals to achieve the sustainable development, United Nations Development programme has identified that Zakat as main factor for achieving the goal”.
The Forum pleads that “Non interest banking system existing elsewhere in the world has not only yielded better and positive results but also duly acknowledged by world bodies like International Monetary Fund, World Bank and other credible agencies”.
The petitioner contends that even within India and outside, top dignitaries in the banking sector have in unequivocal terms expressed full support for introduction of Islamic Banking System.
The petitioner says that J&K Bank is “guilty of having a series of non performing accounts.
“Had there been interest free banking window or system in place, it would have been much easier for the people of the state to become the beneficiaries of broad based financial inclusion within the meaning of Article 39 of the Constitution of India.
“Incidentally, during 2013, Ministry of Finance had requested RBI to give its considered opinion regarding feasibility of introducing Islamic banking in India after examining all the legal, technical and regulatory issues relating to the matter. Accordingly, an Inter- Departmental Group (IDG) on Islamic Banking was constituted in RBI and the report prepared by the Group has been submitted to the Government during February 2016.
“RBI has also forwarded a Technical Analysis Report based on the recommendation of the Group to the Government during December, 2015,” the Forum pleads.
On the basis of the recommendation of the IDG, the Forum said, it has been suggested by the RBI that a few products similar to conventional banking products may be considered for introducing through Islamic Window of the conventional banks after necessary notification by the Government.
The Forum said it has compiled many articles that have appeared in media, and even on national level there are multiple reports by experts laying emphasis on introduction of Islamic Banking in the system.
“These articles and media reports may kindly be considered as representation within the meaning of public interest litigation rules prescribed by the Court,” it pleaded.
Majority of the citizens in Jammu and Kashmir are Muslims by faith and have a constitutional right to enjoy all avenues of development provided the same do not contravene the article of their faith.
It is of common knowledge that receiving and giving of interest (Riba in Quranic parlance) besides being prohibited for Muslims is widely disliked by other faiths as well.
In Hinduism it is said that Brahmana and a Kshatriya shall not lend anything at interest.
Even the United Nations has acknowledged the role of Zakat in supporting the Sustainable Development Goals (SDG).
J&K Bank should place before the court entire details of NPAs and explain steps taken for recovery of the outstanding amount.