Reserve Bank of India (RBI) has decided not to take any further action on the proposal to start banking system that runs on the principles of Sharia in the country.
RBI has given this information in response to a question asked under Right to Information (RTI). The Reserve Bank has said that this decision has been taken after consideration of equal opportunities for banking and financial services in front of all the people. He said that the Reserve Bank and the Indian government have tested the beginning of Islamic banking in the country.
He said, “After considering all such opportunities for banking and financial services, it has been decided that no further action will be taken on the proposal to start Islamic banking in the country.” Islamic or Sharia Banking Ace Financial system is called in which there is no provision of interest. Interest has been prohibited under Islamic rules.
It is notable that a committee headed by former RBI governor Raghuram Rajan had stressed the need to consider deeply on the issue of interest-free banking in the country in 2008. At that time, there was a Congress-led United Progressive Alliance (UPA) government and the Prime Minister was in the hands of Manmohan Singh. The government had asked the Reserve Bank to give detailed information about the steps taken in the direction of introducing Islamic banking in the country.
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