RBI says no to Islamic banking

RBI SAYS IT WON’T PURSUE

New Delhi: In a major move, the RBI has decided not to pursue a proposal for introduction of Islamic banking in the country. Replying to an RTI query, the central bank said the decision was taken after considering “the wider and equal opportunities” available to all citizens to access banking and financial services.

New Delhi, Nov. 12: In a major move, the RBI has decided not to pursue a proposal for introduction of Islamic banking in the country.

Replying to an RTI query, RBI said the decision was taken after considering “the wider and equal opportunities” available to all citizens to access banking and financial services.

Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.

The issue of introduction of Islamic banking in India was examined by the RBI and the government of India, it said.

“Taking into account, the wider and equal opportunities available to all citizens to access banking and financial services, it has been decided not to pursue the proposal further,” RBI said in its reply to the RTI application.

The RBI was asked to provide details of steps being taken for the introduction of Islamic banking in India.

Last year, RBI sent a copy of the IDG report to the finance ministry and recommended an “Islamic window” in conventional banks.