Habibullah requests RBI to find possibility to bring in interest-free banking

By Rizwan Khatik - Mon Jun 11, 10:55 am

Thousands of crores lying unaccounted in banks across the country and belonging to Muslims could be used for the uplift of the poor section of the community, provided the RBI gives the go-ahead.

A move to such an effect has been put forward to the Union finance ministry by the National Commission for Minorities (NCM) chairman Wajahat Habibullah. Habibullah’s idea is based on the Islamic tenet which considers giving and receiving interest against the cause of the religion.

This has resulted in a huge amount of money lying unaccounted in banks, which the NCM hopes could be somehow made use of for the benefit of Muslims in India. And one of them is opening the doors to ‘interest-free’ banking in India for the community. Islamic banking is based on the tenet that giving and receiving interest is against the cause of the religion.

Talking to Mail Today, Habibullah said:”We’re just exploring if the interest-free banking option could be included in the country’s financial system…In case interest-free banking cannot be introduced, can the ministry determine the quantum of money lying idle in banks so that concurrence could be sought from depositors for utilising such amount for the benefit of economically disadvantaged Muslims?”.

The NCM chief clarified that the proposal also includes the option of granting interest-free loans to the Muslim community under the Islamic banking system. But if that is not possible due to the existing banking regulations, the NCM intends to ask the ministry for a way out to utilise the unaccounted money lying in the banks and on which the interest is piling up. So far, the RBI has been wary of the consequences of Islamic banking and had kept the issue under wraps.

The NCM has requested the RBI to find a possibility to bring in interest-free banking for the use of the community.

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