Islamic Banking, Not possible in Bharath without separate legislation – RBI

via HK published on February 6, 2011

Kochi: Kerala high court decision to sell the Nation to Jihadis in
Middle East via clearing the way for Islamic Bank was without taking
into consideration RBI’s opposition.

According to Shri Mohandas who have been closely associating with Dr.
Subramaniyan Swamy in this case the we haven’t yet lost the case.

Dr. Swamy raised two objections –

1.Islamic bank violates RBI Act and Banking Regulation Act and
2.2. Government should not invest in a religion based bank.

Court said that banking is a secular activity of the religion and hence
Govt can invest. For other violations, court said let the RBI and Union
of India decide. Now, RBI and UoI has clarified that the present laws
do not permit islamic banking. AL BARAKAH has applied once but RBI
rejected. They may apply again but RBI cannot approve with present
laws. My information is that the company is planning to obtain RBI
permit by hiding facts. If it is so then jail awaits them.

Dr. Swamy has already informed that he will approach Supreme Courtas
his petition was dismissed. The Media was too eager to conclude that
the Court approved islamic bank. But truth is otherwise.

Reserve Bank of India informed Kerala
High Court in November that – They had not issued any registration
certificate or clearance for the Kerala Government’s proposed Islamic
Bank in Kerala. This was contrary to the claims made by Al Baraka
Financial Service Limited (ABFSL), a financial service floated by the
Kerala State Industrial Development Corporation.

Reserve Bank of India Governor D. Subbarao have already made it
clear that Islamic banking in India is not possible now with the
current banking principles based on interest payment. It can only be
done through a separate legislation.

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