The Indian Economy is blazing since last couple of years, as per government claims and similarly Indian stock exchange is also showing remarkable performance by crossing the 21K mark however, it also dipped below 15K. But it happens in the stock market and market expert still believes that Indian stock Market is still fundamentally strong.
But there is a sector in India still in the nascent stage and is known by Islamic Banking and Finance and Sharia’s (according to Islamic rule) Investment. However, in the globe, it is growing with more than 10% growth rate and currently Islamic Asset is nearby USD500-billion in the world as per Forbes, the premier business magazine stated.
But, in India it is in the embryonic stage. However, there are some non-banking cooperative societies being operated across the India that follows the fundament finance law. But, still no banks as per Reserve Bank of India’s norms has been settled in India.
The RBI in this regard had set up a committee headed by Anand Sinha, chief general Manager in-charge, department of banking operations & development in 2005 to seek out the scope of Islamic banks in India but the committee in its presented report had denied any chance to open any banks in present existing condition of RBI.
But, due to estimating massive revenue in Islamic financial sector, some foreign banks include Citibank, Standard Chartered Bank and HBSC have opened Islamic windows in some of the western countries like US and Europe and several West Asian countries. They are operating on interest-free banking for Islamic windows as they claim.
But, in India there are only few non-banking financial corporates include Al Ameen Islamic Financial & Investment Corp. (India) Ltd, Al-Falah Investment Ltd, Al-Barr Finance House Limited (India), Bank Muscat International (SOAG) and Seyad Shariat Finance (according to Academy for international Modern studies, Canada) are working successfully. These banks work on no-profit-no-loss basis and provide a wide range of loans as well.
These banks provide housing, consumer, personal, educational, automobile and several other loans as per banks’ individual terms and conditions. They usually invest in government securities, small savings schemes or units of mutual funds for earning profits.
The account holders who want only ‘halal’ (fair as per Islamic rules) money can get the loans from these financial institutes as it claims. Now, what is ‘halal’ income?
The ‘halal’ income denotes the income, which comes from avoiding these sources (alcohol, tobacco, porn related fields, pork and interest from exploitation). The incomes from cheating, fraudulent and gambling are also ‘haram’ (invalid).
On the other hand, the stock market and Mutual funds, which most Muslims earlier avoid, are now grabbing the opportunities since the entry of two major investment institutes Parsoli Investment and IDAFA investment.
At present Parsoli Corporation ltd is the biggest known investment company that is listed on Bombay Stock Exchange and Ahmedabad Stock Exchange and has the nexus with network-18 group, however it has been working since 1990. Besides this, IDAFA investment pvt. ltd (www.idafa.com) is another investment firm constituted in 1994 and claims to invest money in Mutual Funds and stock market by following the Islamic rules.
Noor En Ahmed, Newstrack India 28 Apr 2008