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With the appointment of government’s Chief Economic Adviser Raghuram Rajan as the next RBI governor, Union Minority Affairs Minister K Rahman Khan on 6 August hoped that his ministry’s plan to establish Islamic banking in India will get a boost. Khan said Rajan was positive when he met him recently to push the proposal. “The financial reforms commission headed by Rajan had even advocated Islamic banking. I am sure his appointment as RBI governor would be a big push for the proposal,” the Minority Affairs minister was reported as saying.
He hinted that various stake-holders like finance ministry and RBI are apprehensive of the idea of Islamic banking because of its religious overtones. “They believe they will be blamed that they are doing it for religious-based reasons. You can have regulator for chit funds companies, tree companies, this company, that company, companies collecting big money and vanishing but you do not want a Shari’ah-compliance institution,” Khan said. The minister said all over the world, Islamic banking system is in practice and it would enable Muslims to save their money for their and country’s development. In a letter to RBI governor in December 2012, Khan had said the Constitution allowed citizens to practise their faith and it was the state’s duty to facilitate people to practise their religions, arguing in favour of Islamic baking.