FM urged to open interest-free window at banks in India

A delegation of Indian Centre for Islamic Finance (ICIF) called on Union Finance Minister Pranab Mukherjee at his residence in Kolkata on 4th December 2010 and urged him to expedite the process of introducing interest-free banking for the marginalised and the minorities in the country.

Headed by H Abdur Raqeeb, General Secretary, ICIF and Convenor, National Committee on Islamic Banking, the delegation urged the FM to consider the issue in the background of setback in microfinance institutions as well as the RBI’s rural initiative receiving a serious jolt with its pilot project in the North East region.

The delegation presented the FM with a memorandum demanding that “Finance Ministry and RBI undertake a concerted and coordinated effort with experts of RBI, the financial services Industry and Islamic financial experts to accommodate interest free Islamic Banking and provide a level playing field along with the conventional banking at the earliest.”

“To begin with it is requested that the regulators can go for a Pilot Project with a Public, Private and Foreign bank operating in India to open ‘INTEREST – FREE ISLAMIC BANKING WINDOW’(within the existing Indian banking Regulations) in city of Mumbai for a period of one year. Based on this experiment, Government of India and RBI can decide for further course of action. A document has already been submitted by ICIF to RBI on 26th August 2010,” the memorandum suggested.

Finance Minister Pranab Mukherjee assured the delegation that he would ask his secretary (Financial Services) to discuss with RBI and other concerned and arrive at a decision soon.

One thought on “FM urged to open interest-free window at banks in India

  1. Jct: Riba-free Islamic savings banks are the Weak Sister to the Big Sister riba-free timebank in the U.N. Millennium Declaration C6 for a UNILETS interest-free time-based currency to restructure the global financial architecture. Islamic piggy banks are limited to lending the already existing chips they can borrow to lend out, LETS banks are limited to lending up to the available collateral, a far more powerful Sharia-compliant model and it was endorsed by the UK Islamic Party.

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