EVER since the Kerala State Industrial Development Corporation decided to join hands with some groups from the Middle East to launch Islamic banking in the State, the question whether Islamic banking is good for the country or not has attracted animated discussion in different circles-from bankers to financial experts and from vote-bank politicians to patriotic forces.
Islamic Banking, published by India Foundation, New Delhi, discusses Islamic banking threadbare, explains what it is and how it functions and also discusses the global experience with Islamic banking and projects implications for India.
The theoretical part of the book has been done by Shri Amit Malviya, a finance professional in Mumbai. Former Union Minister and expert on economic matters Dr Subramanian Swamy is the moving spirit behind the legal battle against Islamic banking in Kerala. He has given his views on the issue. The petition filed by him in Kerala High Court and the stay order issued by the High Court on the matter have also been included in the book.
Highlighting the truth of Islamic banking the book says that Islamic or sharia banks differ from regular banks in two major ways. One, as commanded in the Koran, the charging to interest is prohibited in all monetary transactions. Two, the Islamic banks are supervised by a board of Islamic scholars and clerics whose job is to ensure that the banks’s activities comply with sharia law. “The truth, however, is that like all banks, sharia banks do charge interest-they just give another name-and that the clerics supervising the banks have ties to extremist, even terrorist groups, which work towards the Islamisation and word dominance.”
The author makes a point that those who support the plea for an alternate financing channel to support the Muslim community need to realise that India’s banking is ‘inclusive’ and the reluctance of some Muslims to use banks is a case of self-exclusion, not discrimination. “Islamic banking is not what is needed to help Muslims. When Below Poverty Line (BPL) families can be helped without communal identification and state benefits can be given on socio-economic grounds, why are Muslims being treated any differently, the book asks.
“The sharia is the cannon law of Muslims. A financial services company set up with government participation which would follow the cannon law of a particular religion is a clear instance of the state favouring a particular religion. This violates Article 27 of the Constitution,” says Dr Subramanian Swamy further adding that the government order issued in this regard also violates Article 14, 15 and Article 25 of the Constitution also.
Dr Swamy further says that the unwritten and unstated danger from the Islamic institution would be that when thousands of crore rupees arrive in Kerala, Muslim youth would get loan, while the Hindus would be denied on one technicality or another. “Word will be spread that if the Hindu converts to Islam he or she will get the loan easily. Given the high unemployment of educated youth in Kerala, and that Hindus are just 52 per cent of the State population it will be in no time that economic pressures will force the State to become Hindu minority. Then the State will drift quickly to Dar-ul-Islam and like in Kashmir, soon the Hindus will have to migrate out or be driven out, or convert to Islam,” Dr Swamy adds.
(India Foundation, New Delhi, [email protected])