Islamic Banking and Microfinance in India - HLS Conf 2013 - Baharul Islam

This paper reports the result of a limited study undertaken with two major Muslim Funds (Deoband, Najibabad) to find out (i) the legal status of their operations; (ii) the legal challenges they face in day to day interactions with government, legal and regulatory authorities and (iii) the perceived changes in the present banking laws that will help them in offering more effective financial products. Following a methodology of survey and case study, the paper concludes with a broad spectrum of legal issues that needs to be addressed by the RBI, if Islamic banking is going to be formally permitted in India. With a parallel probe into the perceptions of banking and regulatory officials, the study also highlights the ‘perception gaps’ that exists between the government and the grassroots organizations.