Is Indian Banking System Ready to Introduce Globally Acclaimed Concept of Indian Banking System?
Practical Lawyer, Eastern Book Publication, September 2011
10 Pages Posted: 26 Sep 2011 Last revised: 28 Sep 2011
Date Written: September 1, 2011
This article highlights the burgeoning significance of Islamic Banking system worldwide which has believed to reach a global investment of $ 1 trillion. Iran, Sudan and Pakistan have Islamic Banks exclusively, whereas, the eastern countries like Malaysia and western markets in United Kingdom, United States and Europe are among 53 countries who have introduced Islamic Banks as a part of their economy. Also reputed banks like Citibank, Standard Chartered, HSBC are operating interest free policies based on Islamic banking in several countries. In backlight of such a response to the Islamic Financial Institutions (IFI) it would not be fallacious to say that it is the new buzzword and too big to ignore. Indian Banking System is a complete stranger to these institutions and needs major amendments in the Banking regulation to introduce it. Adding to these impediments there has been immature challenges as to constitutional validity of IFI, which was appropriately upheld by the Kerala High Court in its latest judgment, permitting the establishment of such institution in the interest of public at large divorcing it from having any association with any religious faith. Part I of this article gives a brief background of the Islamic Banking. Part II discusses in detail the concept of the Islamic Banking in detail. Part III talks about the various initiatives taken by the government to introduce the Islamic Banking. Part IV critically discusses the latest judgment of Kerala HC which throws light on constitutional validity of Islamic Banks. Part V presents the conclusion to this article.
Keywords: Islamic finance, Islamic banking, kelera High court, constitutional validity, islamic financial institution
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