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Saturday, 1 September 2007

Bankers ask government to allow Islamic banking in India

NEW DELHI: International and domestic banks led by Indian Banks Association (IBA) on Wednesday pitched for allowing Islamic banking, estimated at over 1.2 trillion dollars and growing at 15 per cent annually, in India. "It (Islamic banking) is an idea, whose time has come. The IBA will study the concept, but will wait for the regulatory framework by the RBI to run it," IBA Chairman M B N Rao told reporters, on the sidelines of an international conference on Participatory Banking. The two-day conference is being organised by Indo-Arab Economic Cooperation Forum. Islamic finance is based on the main concept of outlawing fixed-interest returns and speculation, as well as forbidding investments in what Islam considers vices such as dealing in alcohol, pork or gambling. Speaking on the occasion, Vice President Hamid Ansari and Deputy Chairman Rajya Sabha Rehman Khan also supported the need for launching Islamic Banking, which would provide an opportunity to invest according to Shariya principles. Under the Islamic Banking, the Central bank would have to work out the proper framework as it requires sharing of profit and loss with depositors and investors, apart from ensuring that the funds comply with RBI and SEBI rules. Sulaiman N Al-Qimlas, Deputy Chairman & Managing Director of Bayt Al Mal, which is a major financial institution in Kuwait also said that their group was interested in getting a licence to start Islamic banking in collaboration with Indian partners.

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