By Raqib Hameed Naik, TwoCircles.net
Srinagar: Mehboob Makhdoomi, an expert on Islamic Banking and alumnus of Harvard and Pennsylvania University, has teamed up with like-minded Kashmiri youth to launch Islamic Banking Kashmir (IBK), an awareness, research and advocacy group dedicated to making Kashmiri people aware about the ethical and religious implication of ‘Interest-free finance’.
IBK will also aim to educate Kashmiris about the benefits of the alternative banking system, in order to provide an avenue to people who don’t prefer to use conventional banking.
Makhdoomi, 31, is a resident of Srinagar and says his interest in pursuing Islamic banking initiative in valley gained momentum after his columns on ‘Islamic finance’ published on intervals since 2013 in the local newspaper Greater Kashmir received good response from the people.
“They expressed their inquisitiveness to know how it works and more importantly, if such a facility could be made available to them. In December, my book on ‘Social Marketing & Conflict resolution’ was released and I was asked to speak on Islamic banking, instead of my book,” says Makhdoomi.
He later shared a concept paper with his colleagues at the civil society group Kashmir Center of Social & Developmental Studies (KCSDS). Their efforts were also instrumental in ensuring that a course in Islamic banking started in Kashmir University.
While terming modern banking system similar to a Ponzi scheme and to support his stand on Islamic banking, Makhdoomi says, “Interest-free Islamic finance has emerged as a viable alternative world over after the 2008 financial meltdown. It is growing at the rate of more than 15%. Not only Muslims countries but modern, secular and industrialized countries like the UK, Singapore, France, Japan and Hong Kong have become hub of Islamic finance & banking. Even World Bank considers it as a priority area.”
“The time is not far away when Reserve Bank of India will provide a green signal to the system of Islamic banking, as they can’t afford to ignore it anymore,” he adds.
Yasir Wani, another Valley-based youth, is the co-founder of IBK. Wani did his MBA from University of Kashmir and PG Diploma in Islamic Banking & Finance from IIBF Hyderabad. He believes that being a Muslim-majority state, Jammu and Kashmir is the best destination to initiate Islamic banking methods so as to develop it as a framework for others to espouse.
“Being a student of Islamic banking a question repeatedly rotates around my mind. Are we ready for Islamic Banking? The question emanates because of the fact that Islamic banking in many countries almost failed in the initial stages,” says Yasir.
“The reason for the failure was no awareness about the concept of Islamic banking among the people, non-availability of trained human resource and no pre research in this field. I am sure that IBK will try to solve these gaps and in parallel act as a strong advocacy platform for the introduction of Islamic banking,” he adds.
IBK wrote to Reserve Bank of India in January, appreciating its report ‘Committee on Medium-term path for Financial Inclusion’ released in December, 2015 which recommended ‘Special windows’ for Interest-free banking within conventional banks and suggested its initiation from Jammu & Kashmir as it is only Muslim-majority state in India. “It is a natural testing laboratory for Interest-Free finance & banking, and that the first Interest-free window should be set up in one of the banks of J&K, which can then serve as a prototype for other states,” said Makhdoomi.