‘Islamic banking laws will not affect financial system’

Posted: Friday, Jun 30, 2006 at 0000 hrs IST
Updated: Friday, Jun 30, 2006 at 0000 hrs IST

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New Delhi, June 29: The Indian banking system is losing a staggering Rs 2-3 lakh crore annually, due to the delay in introducing Islamic banking laws (IBLs), analysts say.

Though Muslim parliamentarians have taken up the issue with Prime Minister Manmohan Singh and the UPA chairperson Sonia Gandhi, the Reserve Bank of India is yet to take any concrete action on introduction of IBLs.

In their presentations, the Muslim Parliamentarians have underlined that Islamic banking can be easily introduced without disturbing the basic fabric of Indian financial system.

K Rehman Khan, deputy chairman of Rajya Sabha, said that products similar to mutual funds can be introduced in line with the fundamentals of Islamic banking laws, which do not recognise interest-based banking.

However, Islamic banking laws are based on trading and thereby sharing of profit. Khan added that once the system is recognised, savings of the Muslim comumity would only make Indian banking richer and stronger.

Muslim Interests

• Islamic banking can be easily introduced without disturbing the basic fabric of Indian financial system
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