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Islamic banking not consistent with existing laws: Reserve Bank

Posted on 10 May 2013

The Reserve Bank said Islamic banking is not consistent with current banking laws in India. “We got to see that Islamic Banking which does not allow charging interest or taking of interest is inconsistent with our existing laws… All that I am saying is Islamic banking is not consistent with current banking laws,” RBI Governor D Subbarao said after the board meeting.
Charging of interest is necessary to conduct banking operation in India because banks have to borrow on which it has to pay interest rate, he said, adding banks have to deposit excess cash with the Reserve Bank on which they get interest…………………………………….Full Article: Source

 
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