Islamic banking ideal for economic growth: Expert

Submitted by admin3 on 1 May 2011 - 9:24pm

Indian Muslim
By IANS,
Bhopal: The interest-free Islamic banking system will provide the ideal thrust t
o India's economic development, an expert said here Sunday.
Islamic banking, which propagates zero-interest lending, can solve not only farm
ers' crisis but will also fill the gap between the financially-excluded and fina
ncially-included classes in India, Irfan Shahid, an economist and expert on Isla
mic banking, told a seminar here Sunday.
The programme was organised by the Muslim Educational Social and Cultural Organi
sation and the Arabic Language and English Education Foundation.
"The Islamic banking industry, which is operating for the past 30 years in the M
iddle East, has gained popularity and curiosity around the globe during the fina
ncial crisis of 2008.
"Despite the financial turmoil that crippled so many large Western institutions,
Islamic banks continued to grow in prominence and size. Right now, about 500 su
ch institutions operating in 75 countries, including Britain, the US and China,"
Shahid said.
According to Shahid, the main objective of Islamic finance is to create a societ
y of investors, unlike the conventional banking system, which has created a soci
ety of borrowers and lenders over the past hundreds of years.
"In the Islamic banking concept, the banks involve themselves in real-time tradi
ng or investment activities with their customers based on various contracts. It
is for all religions, anyone can have an account in it and get the benefits," he
said.
All the products that these banks offer are Sharia-compliant and a Sharia board
decides or monitors what sort of investments the banks can make.
He added that Islamic banking in India will not only benefit the marginalised an
d the minorities in terms of microfinance, but can also attract major investment
s from the Gulf countries.
Kerala is the only state where Islamic banking has begun after the high court pe
rmitted it in February.
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Good Information
Submitted by Nazeer Ataullah (not verified) on 2 May 2011 - 11:48am.
Good to note that, 500 institutions based on Islamic Banking operates 75 countri
es. It creates a society of investors instead of society of borrowers and lender
s. India needs such revolutionary changes to upgrade the status of middle & lowe
r class societies.
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