Islamic finance has emerged as a viable alternative world over after the financial meltdown of the west. It is growing at the rate of more than 15%. Not only Muslim countries but modern, secular and industrialised countries like UK, France, Japan, Singapore and Hong Kong have become hub of Islamic finance and banking. Even World Bank considers it as a priority area.
Addressing a press conference organised by Indian Centre for Islamic Finance (ICIF) at Press Club of India on Dec 7, Mr Muddassir Siddiqui, an international expert on Islamic Finance and Shari’ah head of SNR Denton, Dubai said: “Our country needs US$ 1 trillion to upgrade its infrastructure in order to achieve its target of an annual growth of 9.0% – 9.5%, almost double in the 12th Five-year plan than the 11th year plan.”
Standard &Poor’s document released on Oct 13, 2011 – “Will Islamic finance play a key role in funding Asia’s huge infrastructure task?” – mentions that conventional lending markets being jittery the world is now looking towards alternatives to conventional finance and Islamic finance is one such alternative.
In a report published in the Economist – Economist intelligence unit, Report – GCC trade and investments are flowing towards emerging markets like China and India instead of US and Europe.
Mr Siddiqui also talked of the Prospects of Islamic Finance and said that “an estimated $1.5-trillion funds sloshing around the Middle East, largely from higher oil prices which is going to increase by about 7 Trillion by 2020. Our country is emerging as a global economic power. As per the Planning Commission report, there is a huge gap of US 300 billion (30% funding Gap) to meet the financial requirement of infrastructure sector up to 2017. Islamic financial products are ideally suitable for the much needed funding for the long term investment in various sectors including infrastructure sector.”
Introducing the theme of the press conference, ICIF General Secretary H Abdur Raqeeb said: “Even after forty years of nationalization of the banks, 60% of the people so not have access to formal banking services and only 5.2% of the villages have bank branches. Marginal farmers, petty traders, landless labours, self employed and unorganised sector enterprise, ethnic minority and women – Aam Aadmi of the country continue to form ‘the financially excluded class’.”