RBI says no to Islamic Banking in India

Nov 22 2012, 19:14 IST
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RBI rules out introduction of Islamic Banking. (Agencies) RBI rules out introduction of Islamic Banking. (Agencies)
SummaryOther methods for channelising funds based on Islamic law can be looked at: RBI


The main challenge before the RBI, he said, was to tell banks that financial inclusion is a viable business model and people should be encouraged to actively use bank accounts opened as part of the drive.

Referring to Chandy's plea that money deposited in Kerala should be deployed in the state, the RBI chief said he would request the state to promote schemes in various sectors like tourism and manufacturing. "We will do whatever we can from RBI", he added.

Chandy appealed to banks not merely to consider Kerala as a 'fertile' place to raise deposits, but contemplate funding projects in sectors like manufacturing and tourism in the state.

Banks, the Chief Minister said, should also endeavour to provide education loans to the students as it was the right of every child to pursue education. (MORE) PTI UD

UIDAI Chairman Nandan Nilekani, who was also present at the financial inclusion programme, said Aadhaar would encourage and catalyse financial inclusion.

"Aadhaar can be used as KYC (Know Your Customer)-- proof of identity. If the migrant workers have Aadhaar cards, they can open bank accounts in any state", he added.

In the second phase, with an electronic KYC, he said, it would be possible to open instant bank accounts.

Moreover, Nilekani said, the Aadhaar numbers could be used for direct transfer of subsidies, thereby reducing leakages in delivery mechanism.

In the long run, he said, the government would be able to use the Aadhaar platform for direct transfer of subsidies, including LPG and kerosene.

Speaking at the event, Kerala Finance Minister K M Mani urged banks to be "more generous" while disbursing education loans besides providing fund to the micro-finance sector.

Mani also said that state government was seriously thinking of including financial inclusion as curriculum in schools.

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