Muslim economists welcome RBI move to open interest-free window in banks

New Delhi, Jan 9: Muslim economists have welcomed the recommendation of a committee of India’s federal bank to allow interest-free window in commercial banks in order to ensure financial inclusion.

“It is on our request that they (government) has reached to this decision. We welcome it because this will increase finance on the basis of justice and equity and will eliminate corruption in the financial system,” says Dr Waquar Anwar, financial expert who has been writing on Islamic banking and finance for long.

“It will be pioneer if the economy is built on the basis of profit and loss sharing,” he averred.

The Committee on Medium Term Path for Financial Inclusion of Reserve Bank of India released its report on 28th Dec 2015 recommending measures to increase financial inclusion in the country. One of the major recommendations is opening interest-free windows in existing conventional banks.

On the benefits of the interest-free window, Dr Anwar said: “More and more people will come to banks and save their money. More than 80% people do not take part in banking. If Islamic finance is started these people will come to banks with their small savings.”

Prof Jawed Ahmad Khan, economist and expert on West Asia affairs also welcomed the move saying it will attract huge investment from Arab world.

“India needs infrastructure financing on long terms. If sukook system is adopted, India will attract huge investment from Arab world. Indian Muslims will also use their savings in investment activities,” said Prof. Khan. Courtey: Mumtaz Alam (