RBI rejects unveiling Islamic banking

SME News, Friday, Nov 23, 2012 11:42:54 AM IST

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MUMBAI: The Reserve Bank Governor D Subbarao has rejected the unveiling of Islamic banking in India but stated that other methods for channelising funds which are based on Islamic laws principles can be looked at.

Subbarao said, “Islamic banking is not possible.” It is possible that the central bank could look at other vehicles which are based on Islamic banking principles for channelising NRI funds.

RBI Guv stated that Kerala Chief Minister Oommen Chandy had said that there have been various NRIs who wanted to contribute for the development of the state and that there should be mechanism for channelising funds.

In regard to the high inflation, the Reserve Bank in its past policy review did not opt for slashing reducing interest rates, although it did lower the Cash Reserve Ratio (CRR) by 0.25%, sanctioning Rs 17,500 crore of primary liquidity into the system.

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