Islamic banking in Gujarat? This was the news that stunned the nation.
Seeking clarification on Islamic banking now, BJP leader Subramanian Swamy wrote a letter to Urijit Patel, Governor of RBI, with regards to a news item that was published in a business daily which had claimed that Islamic Development Bank is due to start its operations in the state of Gujarat!
In the letter, Subramanian Swamy stated that earlier a financial institution based on Islamic principles of Shariah was set up in Kerala and he was the one who had challenged the same in the Kerala High Court as it was controverting the sections of the RBI Act.
The BJP leader then stated that at that time the RBI and the Ministry of Finance filed affidavits saying that no financial institution can be set up on the principles of the Islamic law or the Shariah in view of the RBI Act. He mentioned that the Court had disposed of the petition stating that the proposed Islamic Bank is illegal and therefore, the institutions as shut.
Swamy says no Islamic Banking can be allowed
He further wrote and pointed out that there were constant attempts to re-introduce the Islamic Bank in India. He said that since this was not possible legally without an amendment in the present RBI Act hence, he demanded to know that on ‘what presumption or law’ can an Islamic Bank in India is going to start its operation in Gujarat.
On his Twitter account, he said that he is expecting a definitive answer or he will go to court.
Islamic banking is also being contested by many as they feel that it is not a tried and tested financial model that may be able to achieve results in a nation as diverse and secular as India.