Latest Kerala News | Jobs | Malayalam Movies | Films | Tourism Kerala

Islamic Banking in India

Islamic banking is the banking based on the Islamic law (sharia). According to Islamic law the interest is prohibited in the process of banking. The payment as well as the acceptance of interest is prohibited in Islamic law.

In Islamic banking, the banks will conduct business and the outcome of business will be shared with the customers. In Islamic banking, not only the profit is shared with customer but the loss too. The acceptance as well as the payment of interest is not there in the Islamic banking. In the sense of Islamic banking the risk of investment is shared between the banker as well as the investor.

The establishment of Islamic banking in India is not possible as per the current rules and regulations of Reserve Bank. According to the law the banks of India are not permitted to conduct business. The studies are made on the issue by Reguram Rajan and the suggestions favoring the set up of Islamic banking are made.

Islamic banking can bring great changes in the areas of real estate, capital funds as well as mutual funds. In Britain there are many banks running under Islamic law. The general reluctance shown by many people to this banking approach is due to the name “Islamic”. When the similar products are launched under different name people are much more interested.