Interest-free banking ‘inevitable for India’

• Justice Krishna Iyer speaks to reporters after presenting a copy of the memorandum to Professor M. K. Sanu in the presence of prominent personalities. (AN photo)

Arab NewsPublished — Saturday 9 August 2014

Justice V. R. Krishna Iyer, a former judge of the Supreme Court of India, has 

emphasized the need for introducing interest-free banking in the country to eradicate poverty.
“It’s inevitable for India’s inclusive development, especially for the welfare and progress of its downtrodden,” said the justice while talking to reporters in Kochi.
Krishna Iyer, who is chief patron of the International Interfaith Dialogue India (IIDI), said participatory and interest-free banking would boost India’s economic growth and its social development.
IIDI was founded in 2010 with the intention of promoting righteousness and human values in the society through communal harmony and cooperation. 
IIDI intends to present a memorandum to Indian Prime Minister Narendra Modi to introduce the interest-free banking system in the country and take effective steps to promote communal harmony in the country.
The memorandum stressed the significance of respecting the plurality and diversity of India and also of establishing social justice by equitable distribution of wealth and resources.
Krishna Iyer presented a copy of the memorandum to Professor M. K. Sanu during a function at the justice’s residence recently.   
The memorandum urged the government to give top priority to achieving sustainable development for the entire nation, maintaining communal harmony and peace.
Interest-free banking and finance has functioning models in more than 70 countries around the globe, the memorandum said. 
Many western banks have opened participatory banking windows and they cater to the needs of all faith communities. 
“Their success has prompted even the government of India to consider approval of interest-free finance as one among the solutions to present day problems faced by the Indian economy,” the memorandum said, quoting the Raghuram Rajan Committee Report.  
“The fundamental objective of the interest-free banking system is to eliminate exploitation of borrowers. It considers lending as an investment and distributes investment risk between the users and suppliers of funds,” said V. K. Abdul Aziz, a senior official of IIDI. 
“It has been proven that the interest-free banking shall be a vital tool to strengthen the Indian banking sector, promote foreign participation in large-scale infrastructure projects and ensure active participation of some 20 percent Indian citizens living in the country and abroad in banking and financial activities,” Abdul Aziz said.
The move will also help India have a place in the league of major financial centers of the world, promote small and medium enterprises (SMEs) in the country and realize the underlying potential for growth and profitability through banking services to more than 200 million Indians.