A joint delegation of Rajasthan Muslim Forum and the Indian Centre for Islamic Finance (ICIF) on April 17 called on Union Minister of State for Finance Namonarain Meena in New Delhi to discuss with him the feasibility of interest-free Islamic banking in the country.
The delegation members brought to Mr. Meena’s notice a recommendation of the Union Government’s Committee on Financial Sector Reforms, headed by Raghuram Rajan, for creation of a framework for interest-free banking. They said the new banking system would not only be viable for the country but also beneficial for underprivileged sections of society.
The delegation members included ICIF General Secretary H. Abdur Raquib and Jamaat-e-Islami Hind Rajasthan president Mohammed Salim, who is also a member of the Rajasthan Muslim Forum.
The delegation pointed out that large sections of Muslim population in different States had kept themselves from conventional banking because of their religious faith not allowing transactions involving interest. Their investments could benefit the national economy if interest-free banking was permitted in the country.
Mr. Salim said the noted agricultural scientist, M. S. Swaminathan, had recently observed that Islamic banking could be the solution to farmers’ suicide in Vidarbha. About 40 per cent customers of Islamic banking institutions in Malaysia and 20 per cent in Britain are non-Muslims.
Mr. Abdur Raquib submitted to the Union Minister the documents relating to methods and techniques adopted by modern and secular countries to create a level playing field for conventional and Islamic banking. “When London, Tokyo, Singapore and Hong Kong can become hubs of Islamic finance, why not Mumbai or Cochin?” he asked.
Later, the delegation said, in a statement, that Mr. Meena assured of looking into the issue seriously and promised that he would hold detailed discussions with the officers of his department in this connection.
A day later, viz. on April 18, another delegation of Human Welfare Foundation (HWF) and ICIF met MP Mr. E.T. Basheer in New Delhi. HWF General Secretary Prof. K A. Siddique Hassan introduced to Mr. Basheer the various plans in education and health sectors under the HWF’s Vision 2016 project as well as the newly formed SAHULAT Microfinance Society. ICIF General Secretary Mr. Abdur Raquib briefed the present scenario of the Islamic Banking in the Indian context and also presented related documents of the amendments done in the banking laws of the Modern Secular countries in order to create a level playing field for Islamic banking as well as conventional banking. MP Mr. E.T. Basheer assured that he would go through the document and would do what he could.
On April 20, Mr. E.T. Basheer spoke in the Lok Sabha on the need to introduce Islamic banking:
“I want to talk about the alternative economic method; I mean the industry and the banking system. Even though it is not closely connected with the Ministry of External Affairs, when we are discussing all the international collaborations on the economic front, I say that in addition to political diplomacy, economic diplomacy is also to be there. We have to realise one thing. When we hear about Islamic banking and things like that, there is no need to have any kind of allergy to that. Many countries in the world such as Britain, France, Hong Kong, Singapore, US, Thailand, Japan, Australia, China, Korea, Belgium and Sri Lanka are entering into this field in a very big way. We have to realise this.
“By 2020 the Middle-East investment may go up to nine trillion dollars around the world. Similarly, we have to understand about America’s development after 9/11. Some 800 billion dollars of Arab money has been flown from American banks. We have to realise what is happening.
“Sir, what I am suggesting is that India should tap all these chances and we should not have any kind of different method to that. What I am suggesting is that we have to think loudly about that. I am of the opinion that India should give a red carpet reception for this Islamic Banking…. It is the alternative banking with ethics. It has no hooks. It is a banking system with ethics and which is value-based and it has no fabricated economic basis. I think that it will be the best model to be adopted.”