In a recent business gathering initiated by the Indo-Arab Chamber of Commerce, which sought experts from India and Arab countries to come together to discuss and promote the role of Islamic Banking in the infrastructural growth of India there were many a opinions passed.
As per the Islamic faith, charging interest from idle deposits is prohibited by the Islamic banks, however, it allows investment in productive business ventures. Many south-east asian economy, relies heavily on Islamic funds for its infra expansion, the experts opined that its not too far that the Indian government will allow Islamic banking to promote a country which is fund-starved.
T Balakrishnan, the brain behind the country’s first Shariah-compliant financial service, promoted by the Kerala government, Al Barakah Financial Services, pointed out that 75 countries around the globe are thriving on Islamic banking today. Currently, Islamic banks around the globe manage a asset base of over USD 1 trillion (as of 2010) which is projected to reach USD 2.8 trillion by the turn of 2015”. He was highly optimistic that Al Barakah Financial Services, which was refused permission by the RBI early this year to start NBFC operations is still hopeful of getting the regulatory nod.
Hon’ Rahman Khan, Deputy Chairman – Rajya Sabha quoted “The banking model of the Arab countries are far better and more stable than the interest driven banking systems of India”. He continued to say that its the bureaucracy which is deterring the corporate houses to make a move in promoting the growth of the Indian economy. Across the world China, US, Britain, Germany, France and many other non-muslim, non-Arab countries have been successful in implementing the Islamic banking into their systems and meeting their objectives. He is also seeks optimism from a recent statement made by the Prime Minister that it is high time the country looked at the Malaysian model of infra funding.
Shariq Nisar, director at TASIS that advices Shariah-complaint companies in their investment areas, said, "It is not that there is no Islamic banking being practiced in the country now. There are aplenty, but all in an un-organised manner. What we need is a formal approval from regulators, so that large players can enter and tap this huge untapped money for productive purposes."
Sushil Jiwarajka, Chairman, Indo-Arab Chamber of Commerce and Industries commented that “India today needs the fund for its infrastructure development and we endeavour to help bridge the gap between the two nations by removing any misconceptions and misunderstanding”.