NH-2016-q2

UPDATE ON INDIA
NEWHORIZON Shawaal 1437 to Rabi al awwal 1438
The Operation of Islamic Banks Still Opposed in India
but for How Long?
India has an estimated Muslim population of 172 million that is projected to rise to more than 300 million by 2050, making India the country
with the largest Muslim population in the world, according to the latest data released by the Pew Research Centre, a US-based think tank. A
recent discussion on Indian television focusing on the issue of demonetisation and its effects on marginalised communities rapidly tipped over into the
broader issue of Islamic banking in India. It revealed the dichotomy on the opposition to the operation of Islamic banks in India while allowing
company stock deemed Shari’ah compliant to be listed on the Bombay Stock Exchange. Less than 12 months ago the hopes of India’s Muslim
community that Islamic banking might really be about to happen were raised by an apparent deal made during the visit to India’s Prime Minister to
Saudi Arabia but that hope was dashed later.
The Points of View
A panel discussion on the Indian
television programme The Buck Stops
Here debating ‘Communal Politics or
Digital Divide’ was aired on NDTV
on 19 December 2016. The sudden
announcement in November 2016 by
the Indian government to immediately
demonetise large bank notes triggered
a major debate on its impact in
marginalised communities in India.
Ms Barkha Dutt, the discussion panel
moderator, however, remarked early
on that although the debate was not on
Islamic banking she could sense that the
subject was coming up.
Mr Asaduddin Owaisi, one of three
protagonists on the panel, claimed that
following the sudden withdrawal of
large denomination Indian currency
notes there was not enough cash being
disbursed in Muslim neighbourhoods
and the government was duty bound
to ensure that public sector banks send
cash first to the identified marginalised
areas, which rely on a cash economy,
but the government had not done
so. He was quoted as saying that the
government was ensuring that cash
does not reach the Muslim areas; that
the government did not open banks in
Muslim areas and even if banks do exist
in Muslim areas they are declared as a
red zone, which means loans (based on
interest) cannot be taken. Mr Owaisi
was also accused of saying that on one
hand Muslims should not come into
the banking system; that it is un-Islamic
and on the other saying that Muslims
were denied access to the
banking system.
Mr Owaisi is a three-time
Member of Parliament
(MP), representing
Hyderabad in the Lokh
Sabha, the lower house
of the Indian parliament
and also President of
the All India Majlis-e-
Ittehad-ul Muslimeen,
the All India Council of
the Union of Muslims
(AIMIM), a political
party based in the Indian state of
Telangana. The other two protagonists
on the discussion panel were Mr Sambit
Patra, a spokesperson for India’s
ruling Bharatiya Janata Party (BJP)
and Professor Rakesh Sinha of Delhi
University, a historian and political
scientist, leading a Delhi-based think
tank, the India Policy Foundation and
RSS ideologue upholding Hindu values
with a conservative agenda. (RSS stands
for Rashtriya Swayamsevak Sangh or
National Volunteer Organisation.)
Sambit Patra, the BJP spokesperson,
was first asked by the panel moderator
to comment on the demonetisation
issue. Some people claim this is a
communal politics issue, while others
say it is an issue of the very realistic
digital divide that actually exists on
the ground and which predated the
demonetisation announcement. Mr
Patra accepted that the reference to
the digital divide in India merited
Asaduddin Owaisi
at least a debate, but that what
he found deplorable was when
this digital divide was given a
communal angle. He objected to
Mr Owaisi’s reference specifically
to Muslim neighbourhoods and
not marginalised neighbourhoods
that included all ‘other backward
classes’ (OBCs). He pointed out
that Mr Owaisi is a leader and MP
who does not represent a religion,
but represents people of all hue and
colour who are marginalised and who
are poor, be they Hindu or Muslim.
He further accused Mr Owaisi and
his fellow Muslim MPs of failing
to work to ensure that government
public sector banks were opened in
Muslim majority areas leaving their
own community behind, when the
current Indian banking system does
not offer an alternative banking
system that is compatible with
Islamic practice. (The implication
was that the argument had been
turned into a communal issue.)
24 IIBI
www.islamic-banking.com