Why INDIA is not implenting Islamic Banking?
I noticed one thing whenever I heard the term banking, people also mention Islamic Banking. A latest surge in the services of Islamic banking profits few groups but if you ask me personally, I am still waiting to see a clear distinction between Islamic and conventional banking. Anyways, the news that is surprising for the most of accountants is the latest move by the Indian government to not to implement Islamic banking in country!
India on Friday ruled out introducing Islamic banking in the country for the moment, making the wait longer for interest-free access to finance under the principles of Sharia.
The introduction of Islamic banking was recommended by a committee on financial sector reforms, set up by the Planning Commission, for delivery of interest-free finance on a larger scale, even through the banking system.
However, the government decided not to go ahead with the recommendations, and said it was not feasible to introduce the new system in the current scheme of things.
‘In the current statutory and regulatory framework, it is not feasible for banks in India to undertake Islamic banking activities,’ Minister of State for Finance Namo Narain Meena told the Lok Sabha Friday.
He said the rules will apply to domestic banks and their international operations and any foreign bank operating in India.
A large number of around 150 million Muslims in India – the third largest Muslim population in the world after Indonesia and Pakistan – prefer to stay away from commercial banks due to religious proscriptions against interest-driven banking.
The values of interest-free Islamic banking are finding greater recognition. China, which has around 80 million Muslims, recently gave its first licence for Islamic banking to the Bank of Ningxia.
They must take serious steps now to be global and accept Islamic banking. Let us know your views as why this move was made from them?