“Islamic window” in banking

Reserve Bank of India, has reportedly proposed opening of “Islamic window” in conventional banks for “gradual” introduction of Sharia-compliant or interest-free banking in the country.Both the Centre and RBI are exploring the possibility of introduction of Islamic banking for long to ensure financial inclusion of those sections of the society that remain excluded due to religious reasons.In this regard, RBI has also prepared a technical analysis report and submitted to the Union Finance Ministry for its consideration.

Islamic or Sharia banking is a finance system based on the principles of not charging interest. The charging of interest is prohibited under Islam. However, in recent times both the Union Government and the RBI have been exploring the possibility of introduction of Islamic banking for a while to ensure financial inclusion of those sections of society that have remain excluded due to religious reasons.