Islamic Banking will benefit India more than Muslims: Mufti Abdul Kadir Barkatullah




By Mumtaz Alam Falahi, TwoCircles.net,

New Delhi: The Islamic Banking and Finance system will benefit the development of India more than the Muslim community here, said Mufti Abdul Kadir Barkatullah, Islamic Shariah Advisor to several banks and financial institutions in Britain. He was interacting with mediapersons today at India Islamic Cultural Centre in New Delhi.

“The rank and file of the Indian bureaucracy has deep prejudice against Muslims. By allowing Islamic Banking they don’t want to give Muslims undue political capital although it will benefit the development of the country more than the Muslims,” said Mufti Barkatullah, Member, Shariah Supervisory Board at Islamic Bank of Britain, United National Bank, Lloyds TSB and Alburaq of ABC Bank International (UK).

A trained mufti from Darul Uloom Deoband where he also did Alim and Fazil courses before doing B.Sc. (Hons) in Economics in London and M.Phil. in Informatics from the University of Wales, Mufti Barkatullah is on a 30-day visit to India meeting individuals and groups and visiting institutions with an aim to pave the path for Islamic Banking in India.

Asked if Reserve Bank of India can introduce Islamic Banking or it can be done only by the government, Mufti Barkatullah said: Though lawyers have both opinions but the RBI can do it if it has a will to do. RBI can sympathetically interpret the current banking law of the country to introduce Islamic Banking. The British example is there. Fifteen years ago the Bank of England rejected introduction of Islamic Bnaking citing it will harm the current banking laws of the country but around 2000 they were able to find out a way to introduce Islamic Banking in the country without changing the law. They just sympathetically interpreted the law to accommodate Islamic Banking.


Mufti Abdul Qadir Barkatullah (second from right) addressing mediapersons at India Islamic Cultural Centre on introduction of Islamic Banking system in India

Mufti Barkatullah, who has also advised Indian financial institutions like Bajaj Allianz, Taurus Ethical and General Insurance, talked to TwoCircls.net on related issues:

What are the blockades in the way to the introduction of Islamic Banking system in India?

Three main blockades: First is the mindset of resistance to change. The financial world and banks are the last ones to change themselves in response to the needs of the society. Second hurdle is bureaucracy. Bureaucracy is overburdened with current regulatory task, and they don’t want to learn new things. Third is the political bickering. The government and the opposition will use Islamic Banking as a football. So they don’t want to bring this issue in the public and introduce legislative changes to allow Islamic Banking.

Britain introduced Islamic Banking about a decade ago. What important role did the British Muslim community played in this regard?

It is difficult to assess their role but the Muslim community has been very much participatory within the ranks of the ruling Labor Party. So lobbying for Islamic Banking was very much there. Besides, the Labor Party is thought to be traditionally very soft to immigrants. More importantly, the terror attacks in America and UK also gave the feeling that the Muslim community is uncomfortable with current situation, so the UK government designed inclusive financial policy to include every section of the society in the economy of the country. Muslims on religious ground were not participating in the financial system. Most importantly, as US, Europe and Far East were stealing the global economic importance of London, so the British Government wanted to reassert their financial position at international stage and they did it by opening up the Shariah complaint finance. Today there are one retail bank, two retail windows and five investment banks in the country.

Efforts have been made by individuals and groups in India also to impress the government to introduce Islamic Banking system. They have met Finance Minister Pranab Mukherjee and even Prime Minister but these two have shied from giving any clear indication about opening Islamic Banking system in the country. What do you think is lacking with the Muslim community in India?

I can guess that there is not enough pressure from the Muslim community as a united front on the current Congress government. Muslims and non-Muslims, financial world and politicians they all are in the same category as far as their getting convinced on the issue is concerned. I am not surprised that Muslims also need to be won over for the Islamic finance. That’s why Muslim community is not putting enough pressure on the government.

Comments

A good start

For any new change in the basic legal framework of a democratic country needs a two pronged strategy. There should be a strong will by the political class and the bureaucracy which should be buoyed by the beneficiary lobby groups. Unfortunately for the introduction of Islamic finance in India, there is an acute lack of interest on both fronts. Although a reasonable amount of work is being done to convince the political class, there isn't enough done to arouse the nascent or dormant demand for such a service in India.
Nevertheless, I am optimistic on the current efforts being more inclusive and InshAllah will lead us to the common good.