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RBI rejects Islamic banking in India, says equal access available to all

RBI rejects Islamic banking in India, says equal access available to all on Business Standard. Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.

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RBI rejects Islamic banking in India, says equal access available to all

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  1. RBI rejects Islamic banking in India, says equal access available to all Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam. RBI rejects Islamic banking in India, says equal access available to all on Business Standard. Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.

  2. In a major move, the Reserve Bank of India (RBI) has decided not to pursue a proposal for introduction of Islamic banking in the country. Replying to an RTI query, the central bank said the decision was taken after considering “the wider and equal opportunities” available to all citizens to access banking and financial services. 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 Islamic banking in India was examined by the RBI and the government of India, it 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,” the central bank said in its reply to the RTI application filed by this PTI correspondent. The RBI was asked to provide details of steps being taken for the introduction of Islamic or ‘interest-free’ banking in India. Prime Minister Narendra Modi had on August 28, 2014, launched Jan Dhan Yojana, a national mission to bring about comprehensive financial inclusion of all the households in the country. In late 2008, 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. "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.

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