A major campaign to introduce Islamic banking and finance into India was kicked off in the Kerala city of Kochi on July 23 with Justice Krishna Iyer taking the lead. “I welcome Islamic finance in India,” said Iyer, a former Supreme Court judge. “Islamic finance has proven successful in poverty alleviation and promoting sustainable growth in many countries, including the United States, and it is very relevant in our country where 20 million people are starving,” Iyer said.
The justice made this statement while proclaiming the plan to hold an international seminar in Kochi on October 4-6 on the prospects of introducing Islamic finance in India. He said Islamic finance, which is based on humane principles, was good for all of humanity.
“Those who support humanism should welcome Islamic banking and finance in India,” Iyer told the gathering, which was attended by a large number of prominent personalities including TPM Ibrahim Khan, Additional Solicitor General of India.
The seminar was organised by the Islamic University in Shanthapuram in cooperation with the Jeddah-based Islamic Research & Training Institute (IRTI) of Islamic Development Bank. International speakers included Bambang Brodjonegoro (Indonesia), Omar Chapra (Saudi Arabia), Mohammed Obaidullah (IRTI), Monzir Kahf (USA), Nazim Ali (Harvard University), Ali Quradagi (Qatar), Hussain Hamid Hassan (UAE) and Nizam Yakuby (Bahrain).
Iyer criticised those who oppose Islamic finance on religious grounds. “The interest-free Islamic finance is a better option for countries like India. People may doubt whether this system can survive without taking interest. But I can tell you that a system that supports social development will never fail,” he said.
T. Arifali, chairman of the Islamic University’s council, delivered the keynote speech and said Islamic finance would contribute to further strengthening the Indian economy.
“India is a pluralistic society. There is nothing wrong in introducing Islamic finance in the country if it is good for our country and its people,” he said. “If we can accept cultural pluralism, why don’t we try economic pluralism?” he said, adding that all religions have prohibited usury.
Arifali said he believed the introduction of Islamic banking would encourage millions of Muslims in the country to pump their funds into the economy. A substantial number of India’s nearly 200 million Muslims do not like to deal with interest-based banking because of religious objections.
Brodjonegoro, director general of IRTI, pledged his organisation’s support to the seminar to spread awareness about Islamic banking and finance in India. “I am quite happy to learn that India is actively considering introduction of the interest-free banking system,” he said in a statement on the occasion.
The three-day seminar is titled “Islamic Finance in India: Products, Institutions, and Regulations.” It will be attended by representatives from regulatory bodies, professional organisations, business firms and foreign and Indian financial institutions as well as university students and social activists.
“The seminar will discuss regulatory and Shari’ah issues in implementing Islamic finance in India,” said H. Abdur Raqeeb, chairman of the organising committee, who has been spearheading the campaign to introduce Islamic banking in the country.
Papers to be presented at the seminar will deal with various products and structures of Islamic banking and finance that fit to India. Matters relating to commercial banking, insurance, investment funds, microfinance, Zakat and endowments will also be discussed.
The seminar comes at a time when Islamic finance has become a hot topic for discussion across the world, especially since the global economic crisis. Leading economists and financial experts have recognised Islamic finance as a sustainable alternative to the interest-based conventional financial system.
Many non-Muslim countries such as the UK, US, Singapore, France and Australia are competing with one another to become Islamic finance hubs. Abdur Raqeeb urged India to join the bandwagon to benefit from the development-oriented system.
Abdussalam Ahmed, Director of the Islamic University and General Convener of the seminar, thanked the IDB and IRTI for their support to the event. He described IDB as the most successful institution under the Organisation of the Islamic Conference. IDB has financed several educational and health projects in India.
Justice Iyer is the seminar’s chief patron while businessmen Gulfar Mohammed Ali and P.V. Abdul Wahab are patrons. The organising committee includes Justice Abdul Gafoor, M.D. Nalapat, Justice P.K. Shamsudheen, Mohammed Babu Sait and T. Balakrishnan.