Islamic Banking in India? No Deadline Set Yet, Says RBI
No deadline has been set for the introduction of Sharia or interest-free banking in India, the Reserve Bank of India (RBI) has said.
Reserve Bank of India (RBI (Photo: Reuters)
New Delhi: No deadline has been set for the introduction of Sharia or interest-free banking in India, the Reserve Bank of India (RBI) has said.
Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.
The RBI had earlier proposed the opening of "Islamic window" in conventional banks for a gradual introduction of Sharia- compliant banking.
Responding to an RTI application, the RBI said it has not taken any step to introduce Islamic window in banks for a gradual introduction of Sharia-compliant interest-free banking in India.
"RBI has not set any deadline for introduction of interest-free banking," the central bank said in response to the RTI query filed by PTI.
The RBI had in February last year sent a copy of the IDG to the Finance Ministry.
"In our considered opinion, given the complexities of Islamic finance and various regulatory and supervisory challenges involved in the matter and also due to the fact that Indian banks have no experience in this field, Islamic banking may be introduced in India in a gradual manner," the central bank had told the Ministry in a letter.
"Certain faiths prohibit the use of financial instruments that pay interest. The non-availability of interest-free banking products results in some Indians, including those in the economically disadvantaged strata of society, not being able to access banking products and services due to reasons of faith," the committee had said.
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