Wednesday, April 11, 2012

Comments posted on Radiance Viewsweekly website over its article:Introduce Alternate Banking Window in Conventional Banks: ICIF :

Indian Centre of Islamic Finance delegation's visit to an Indian government official to lobby for introducing Islamic Banking windows in conventional Banks as a pilot project, is a sincere effort to help provide Islamic Banking facilities to primarily Muslim citizens of India to abide by their strict Islamic injunctions against interest. However, as the balance of power is in the hands of a committed bureaucracy as well as the ruling class, ICIF should realise that even if Islamic Banking is adopted by Indian Banking system, the entire control of the facilities offered may or may not be in strict compliance with Sharia requirements. ICIF should consider how Muslim Personal Laws are being flaunted with impunity by the government, legislation,bureaucracy as well as judiciary and we have a big ongoing struggle to get Government to grant us full constitutional freedom to practice our religion in all its manifestations and corollaries. Time and again simple minded and sincere people have relied on State to be fair with Muslims. However, there seems to be a ideological reluctance by all section of Indian governance, to 'appease' Muslims, even though their demands are just, constitutional, legal, viable and deserving. Muslims have no effective political leverage with the political class. So much so, that we have not even planned to lobby the political parties first, to include Muslim demand for Islamic Banking in their manifesto. I doubt even either Muslim League or Welfare Party of India, has included in their manifesto, the Muslim demand for Islamic Banking facilities. So all such visits to government ministers and bureaucrats become fruitless and increase Muslim frustrations when their most cherished demand are merely given polite hearing but never any effort to move in the direction of even remotely coming forward with any positive sign that Islamic Banking is under consideration. This state of affair should force us to review our strategies for the achievement of our goal. A window of opportunity could open, when globalized India now desperate for Foreign Funds might look to Gulf countries with bulging Sovereign Funds, to invest its major infrastructure projects. I would suggest that we should lobby with investing Gulf counties, to channelize their investment through Islamic Banking system and as an extension of cooperation, lobby with Indian authorities to allow private Islamic Banks from Gulf countries to open their full branches as pilot project to offer Islamic Banking facilities to all sections of Indian population. Since we would be helping our country to raise billions in investment funds for national or private projects, we will certainly cultivate some leverage to our demands on our government to come to a trilateral arrangement, so that it may not appear to be politically vulnerable to opposition charge of 'appeasement' of Indian Muslims. Our efforts will be based on a fair exchange of give and take and we will not be begging for favors of without any direct and visible quid pro quo. I would request Indian Centre for Islamic Finance (ICIF). ICIF must proceed with the project in a professional manner instead of throwing the ball in the court of a reluctant government that is not interested to play the ball with its Muslim citizens.

Ghulam Muhammed, Mumbai


Introduce Alternate Banking Window in Conventional Banks: ICIF



In its relentless pursuit to introduce Islamic Finance and Banking in India, a delegation of Indian Centre for Islamic Finance-ICIF called on Union Minister of State for Finance Namo Narain Meena at his residence in the Capital on Mar 26. The delegation presented important documents to the minister and discussed the possibility of introducing Islamic banking windows in the conventional banks as a pilot project to start with, and also constituting an expert committee to look into the feasibility of Interest-free Islamic banking in the country, taking into account the experiences in modern, secular and industrialised countries like UK, Japan, France, Singapore and Hong Kong and recently in China.

The delegation also convinced the minister that this system of banking is not confined to a particular class or particular religious followers. It pointed out that as countries like China are forging ahead into Islamic Banking in a big way, India that has a tremendous potential to introduce this system also should not lag behind. India has a preferable edge over China because of the historical ties and cultural affinity between GCC countries.

Referring to two documents – Standard & Poor’s “Will Islamic finance play a key role in funding Asia’s huge infrastructure task?” and The Economists in which details of Sukuk-asset based bonds for infrastructure development were discussed, the minister enquired more on its details and assured the delegation that he would go through the documents and forward them to RBI for follow-up action.

ICIF General Secretary also referred to the recommendations of the Committee on Financial Sector Reforms chaired by Dr Raghuram Rajan of the Planning Commission of India which recommended interest-free banking to be introduced in the main banking system for inclusive growth with innovation.

The delegation made the following two specific requests before the Minister:

a)      To introduce Alternate Banking Window as a pilot project in the conventional Bank, which requires only an executive order from the Finance Ministry. A document in this regard has been submitted to the Finance Ministry.

b)      To constitute a committee of experts to explore the feasibility of alternative interest free banking in the country in the light of the experiments carried out in modern, secular and industrialised countries like UK, Hong Kong, Singapore, Japan and recently in China as well.

The delegation consisted of ICIF General Secretary, Mr Abdur Raqeeb; Secretary Jamaat-e-Islami Hind Er. Mohammed Salim, Mr. Ali Jasim and Mr. Anisur Rahman Nadvi of ICIF.

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