By Syed Zahid Ahmad,
India is a secular country where we respect all religions and allow all citizens to follow the religions they believe in. It is strange that such rights are not allowed in the banking sector. Considerably the banking activities very much affect our livelihood and economic growth. Since Muslims find adverse banking and financial sector regulations, they are unable to get due financial supports for improving their economic conditions. Thus categorically they belong to the most backward communities in India.
Whenever appeals have been made for interest free banking, RBI and most recently the Government of India has said that Islamic banking is not possible in India because the banking regulation act does not allow Islamic banking. There has been no serious study to comply with this demand and rather efforts have been made to suppress it.
We know that Islamic ethics strictly prohibit interest based transaction and thus Muslims need to avoid interest. The RBI’s interest policy instead of allowing Muslims to get escape from interest rather forces them to transact interest based banking. Until Indian Muslims are allowed to transact interest free banking, we cannot say that India is a secular democratic country in totality. Since the interest policy regulated by RBI is against Islam we can say that RBI is regulating banking against Islam. If any policy is against any religion affecting the lives of its followers, how can we call that a secular policy?
Considerably there is nothing called Islamic Banking in Islamic scriptures. Islamic ethics strictly prohibits interest, so Muslims specifically need banking without interest. For interest free banking, we don’t need any Shariah Board or Islamic Jurists to monitor interest free banking and finance. If we thoroughly study the RBI Act 1934, and the Banking Regulation Act 1949, we may find that no clause of any act disallows anyone to manage interest free bank in India. The only hindrance is the interest policy declared by the RBI from time to time which specifies the deposit and lending rates supposed to be maintained by any bank. So, main problem lies with the RBI’s interest rate policy and not any specific act.
Interest free banking would not require any parallel banking regulation, but just needs RBI’s permission to accept any sort of deposits and lend money with flexible interest rate structure with a possibility to have zero percent interest at any bank. This would serve the purpose and we don’t need any sort of amendment in any act. We don’t need Islamic banking but just to create provision for accepting deposits and lending money without interest. RBI can self do it with its regulatory authorization. It will make RBI and Government of India more secular by fulfilling Muslim’s demand of religion in India’s banking sector. When there is a will, there is a way. Is there any will by the Reserve Bank of India and the Government of India to resolve Muslims problems in the banking sector?
Link
www.aicmeu.org
(The author is General Secretary, All India Council of Muslim Economic Upliftment Ltd. Trust. He can be contacted at Mobile – (+91) 9869 814 113, E Mail – [email protected])