RBI proposes opening Islamic banking windows

Reported by: |Updated: November 21, 2016

islamicThe Reserve Bank of India has suggested ‘Islamic banking windows’ in banks as part of the plan to introduce Sharia-compliant or interest-free banking in India. The government and the RBI have been examining the viability of introducing Islamic banking in the country, especially to meet financial inclusion targets, especially in those sections of the society, which are influenced by religious beliefs. RBI has responded a finance ministry query stating that given the complexities of Islamic finance and various regulatory and supervisory challenges involved in the matter and also due to the fact that Indian banks have no experience in this field, Islamic banking may be introduced in India in a gradual manner. Initially, a few simple products which are similar to conventional banking products may be considered for introduction through Islamic window of the conventional banks after necessary notification by the government, it said. Full-fledged Islamic banking may be considered at a later stage depending on the experience gained in course of time, it has recommended.