Jammu and Kashmir Bank mulls Islamic banking

Newly-appointed Jammu and Kashmir Bank chairman Parvez Ahmad has said that the state government-controlled lender was ready to offer Islamic banking, if the Reserve Bank of India approved the move.

Ahmad said there was a strong demand for such banking service in Kashmir but RBI would need to examine the proposal. “There is a lot of demand for Islamic banking in the state. We will examine the proposal and we have to also take RBI on board,” he said. Currently , there are no guidelines for Islamic banking, which is based on the principles of not charging interest.

Recently, RBI had suggested that it would review the norms. “Towards mainstreaming these excluded sections, it is proposed to explore the modalities of introducing interest-free banking products in the country in consultation with the government,” it had said in its annual report.