Islamic banking is here, thanks to BJP’s co- op minister
Mumbai: In a first in the mainstream banking sector in Maharashtra, a cooperative bank controlled by BJP leader and state cooperation minister Subhash Deshmukh has launched Shariacompliant Islamic banking. Here, interest- free deposits will be accepted from both Muslims and nonMuslims and distributed largely to the needy from the minority community at zero rates of interest to ensure their financial inclusion.
So far, the Lokmangal Cooperative Bank Ltd, controlled by Deshmukh, has distributed Rs 2.50 lakh to poor Muslims through the route. The cooperation minister will now call on other banks and financial institutions in Maharashtra to follow suit and adopt this model, which is also referred to as “participatory banking”.
“Under Islamic banking policy, depositors are not paid interest. Similarly the borrowers too will not be charged any interest for the money lent,” Deshmukh, who is the chairman of the bank, told dna. The bank has nine branches, including eight in Solapur and one in Pune, and Deshmukh, a MLA from Solapur ( South), said all of them would get a separate counter for such Islamic, interest- free deposits and loans.
Deshmukh added that during the inauguration of a branch of his bank at Barshi in Solapur this week, he was called upon to adopt the model, after which he announced it. Two persons, including a Hindu, then contributed Rs 1 lakh and Rs 50,000 as interest- free deposits.
“I then said that by evening, this money will be distributed free of interest, based on their recommendations,” he said, adding that the money was given to 12 needy people.
“We will see if the Reserve Bank of India ( RBI) or Government of India come out with rules in this regard... we will have to take some nominal service charge ( from borrowers) for ( administrative costs like) staff, electricity bills and stationery,” said Deshmukh, adding that even if they were not allowed to charge this nominal service fee, they would continue giving out interest- free loans.
Deshmukh with CM Fadnavis during the swearing in ( FILE PIC)