Interest-free Islamic banking a boon for poor

Proponents of Islamic banking have welcomed the Kerala high court’s move to dismiss a petition challenging the state government’s support to an Islamic financial institution. Rooting for India to include interestfree windows in conventional banks, Abdur Raqeeb, general secretary of the Indian Centre for Islamic Finance said nations around the world were looking seriously at Islamic banking. “If the UK, Hong Kong, Singapore, France can incorporate Islamic banking, India too can look at it,” he said, adding that they had given the RBI and the finance ministry a report to start an interest-free window in conventional banks within the existing Indian banking regulation act. “We are hopeful,” he said. Conventional banks have started testing the waters, making inroads into the new format. In 2008, Malaysia’s Securities Commission, which aims to make the country a hub for global Islamic banking, approved Reliance Asset Management as an Islamic fund manager. Banks like ICICI and Kotak have shariacompliant windows in their Gulf operations. Asset management firms offer such services, too. But they are at a nascent stage and may grow with Gulf funds and NRIs as potential investors.