India is all set to embrace Islamic Banking and Finance as reforming the current banking law to allow sharia compliant banking is on top of Finance Minister Pranav Mukherjee’s to-do list. Banking Laws Amendment Bill, 2010 proposes to bring about the necessary changes in Indian Banking Law to open doors for Islamic Banking and Finance in India – which has done extremely well even in non-Islamic countries like UK and Sri Lanka.
Apart from providing finance of their preference to one of the largest Muslim population in the world, it will enable Indian projects to receive finance from Middle East and other countries where lenders prefer Islamic finance to other conventional methods of financial transactions. However, is India ready to take on the opportunity?
One of the key factor that will determine India’s success at Islamic finance is availability of trained personnel. For the youth in India, this brings fresh opportunity. Those who learn the intricacies of Islamic finance can look forward to meteoric growth as demand for experts will exceed supply right from the beginning. On the other hand, it will be a challenge before banks and financial institutions to find experts for various roles. One of the most difficult task may prove to be creation of a Sharia board which is required to govern and audit compliance of all the products and services with Islamic principles. Continue reading