A one-day conference on International Banking and Finance: Issues, Challenges and Solutions was organised at the Gujarat National Law University , Gandhi Nagar in Gujarat on July 22.
Gujarat National Law University (GNLU), Gandhinagar, www.gnlu.ac.in, is one of the top ten premier national law universities of India. It is also a nodal agency, mandated to enhance standards of legal education, in 32 law colleges of Gujarat, catering nearly 12,000 students every year. It aims to advance and disseminate learning and knowledge of law and legal processes and their role in national development.
The session ‘Islamic Banking & International Issues’ was chaired by Mr H Abdur Raqeeb, General Secretary, Indian Centre for Islamic Finance (ICIF) New Delhi along with Mr. G.P. Mistri, CEO, the Vijay Co-operative Bank Ltd. Ahmedabad.
In his presentation, Mr Raqeeb stated that India should look into the prospects on Islamic Banking by discussing in detail how modern secular countries have forayed into Islamic banking.
He said it can be brought to India without hampering the secular fabric of the country by pointing out the Kerala High Court verdict in 2011 stating that constitutionally there is no problem in introducing Islamic banking, nor it is promotion of a religion. However he said there are a lot of concerns among people which need to be addressed and this is exactly what Indian Centre for Islamic Finance is doing by creating awareness.
Mr Raqeeb said Islamic Banking will play a significant role in achieving financial inclusion which was stated by Dr Raghuram Rajan, who headed the Committee on Financial Sector Reforms (CFSR) of the Planning Commission, in 2009 which mentioned in its report that interest-free banking should be implemented on large scale basis to achieve financial inclusion.
Since the conference was held under GNLU Center for banking investment & taxation, Mr Raqeeb, referred to the statement of Lord Philip, Chief Justice of UK who stated that that Islamic legal principles could be employed to deal with family and marital arguments and to regulate finance. He referred to the judgment of Supreme Court comprising Chief Justice of India S. H. Kapadia and Justice Swatanter Kumar in ICICI BANK LTD vs Official Liquidator of ASP Star Industries Ltd and others (2010) 10 SCC 1-28 that ”Commercial and economic laws” like 1949 Act have to be interpreted with “External aids”, “Subsequent events” as well as “Subsequent growth of law and new concepts”.
After considering various statutory provisions of the 1949 Act, the Apex Court, inter alia, held that ”the 1949 Act leaves ample scope for banking companies to undertake such additional businesses as are not violative of prohibitive and restrictive statutory provisions like those contained in Ss. 8 and 9
For Infrastructure development, he mentioned about the document of Economist Intelligent Unit (EIU) which provides details on how GCC countries with liquidity are looking towards emerging markets like India and China for huge investments and also dealt with the recent document of Standard & Poors’ –‘Will Islamic Finance play a key role in funding Asia’s huge Infrastructure Task?’ and instruments like Sukuk can be used by India as well for its infrastructure development which has an ambitious target of US$ One trillion in its 12th five year plan .
ICIF had arranged various documents related to Islamic finance & banking worldwide and the officials and participants took great interest in having a look into them.