Islamic Banking

Standard Chartered Pitches for Islamic Banking in India

Bob Reynolds 30 August 2007

Standard Chartered Pitches for Islamic Banking in India

Standard Chartered Bank has argued for Islamic banking to be widely available in India. The bank, which is active in Shariah-law products and services around the world, wants access to the second largest population of Muslims worldwide. India has 150 million Muslims. "Globally we are a significant player in Islamic banking. Current regulation does not allow Islamic banking in India," the bank’s spokesperson in India, Arijit De, said. “Standard Chartered Bank is the world’s largest underwriter of Islamic banking products and has a presence in 57 countries. We are keen to launch such products here because India has the second largest Muslim population after Indonesia. We would be interested in offering the products when the Reserve Bank of India allows it.” Islamic banking is not allowed in India under the current Banking Regulation Act. However, the Reserve Bank of India allows financial products based on Shariah law through the non-banking finance route in a particular region. RBI official Alpana Kilawala said no bank had yet sought the regulator’s approval to offer Islamic banking products in the country. The RBI set up a committee headed by Anand Sinha, chief general manager in charge of banking operations and development, in July 2005 to study the possibilities of Islamic banking. The committee recommended that such products could not be allowed under existing regulations. Later, the bank set up an internal group to allow overseas branches of domestic banks to offer the products.

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