Blow to #Islamic #Banking in #India

Before handing over his charge to present Reserve Bank of India (RBI) Governor Urjit Patel, former Governor Raghuram Rajan had proposed working with the Government to introduce Islamic Banking. Most recently, Union Finance Ministry said that Islamic banking was not relevant any more as the Government has already introduced several programmes for all citizens towards financial inclusion. Finance Minister Santosh Kumar Gangwar said various legal changes are needed if even limited products were to be introduced under Islamic banking. It is estimated that 180 million Muslims in India are unable to access Islamic banking because of non-availability of interest free banking. RBI in its report had said it would explore to introduce interest-free banking products in consultation with the government, but before the consultation could be held, the Government of India derailed this whole process.