Arshad Shaikh, Media In-charge of Jamaat-e-Islami Hind, presented a paper on Interest-Free Banking in India in the light of recent RBI Notification at a programme organised by Forum for Discussion on Economic Issues, a joint forum of Sahulat and Radiance Viewsweekly in the national capital on 14 February.
Arshad Shaikh, while appreciating the role and efforts of Indian Centre for Islamic Finance (ICIF), under the guidance of H Abdur Raqeeb, for the introduction of Islamic Banking in India since the last one decade said that the RBI report of CMPFI is a major breakthrough for the prospects of Islamic Banking in India and really a game changer. The central concept in interest-free banking and finance is justice, which is achieved mainly through the sharing of risk.
Shaikh also raised some questions which require to be explored further like: What will be the impact of the opening of Islamic Banks on the economic empowerment and prosperity of the Muslim community? Will India start getting more FDI through the GCC and other Muslim countries? Will the non-Muslims also adopt and use the Shari’ah compliant banking products? Will it improve the investment climate for infra projects in India?
Dr. Waquar Anwar, Secretary Board of Islamic Publications and Financial Advisor to JIH in his reflection said that this is the first step without any changes in the RBI regulation. In the existing framework of the RBI regulation many things can be done which is a positive sign. The work that requires to be taken up after change in the Banking regulations is still on. It is a step ahead in the right direction and opens up the debate to explore further.
Arshad Ajmal, Vice President Sahulat Microfinance Society, said in the Muslim society there is no financial inclusion. The empirical data or the national data shows that Muslims do not have any problem in long-term finance and they believe it is Shari’ah-compliant. In formal finance, the participation of Muslims in the deposit side is very low. The World Bank had formed a committee as Access to and Use of Islamic Finance. The data was collected from 65 countries where 75 per cent Muslims are covered. From the demand side it was observed there was no discrimination in taking loan but it was not in the case of deposit. He questioned what the size of Islamic finance in world economy is. Growth is no doubt 15 per cent but what is the size?
Javed Ahmad Khan, Professor at the Centre of West Asian Studies, Jamia Millia Islamia, said that it is not anything in the interest of Islam but rather it is simply a business venture. The idea behind it is to attract internal and external funds. Even though it is not meant exclusively for us, it will help us in return in one way or the other.