ESTABLISHMENT OF ISLAMIC BANK

Mohammed Khaleelullah (Querist) 31 December 2010 This query is : Resolved
DEAR EXPERTS,
KINDLY CLARIFY THE FOLLOWING QUERIES,
1.DOES THE CONSTITUTION OR ANY OTHER LAW OF THE LAND PROHIBITS ESTABLISHMENT OF ISLAMIC BANK BY THE STATE?
2.DOES THE CONSTITUTION OR ANY OTHER LAW OF THE LAND PROHIBITS ESTABLISHMENT OF ISLAMIC BANK BY AN INDIVIDUAL?
THANKS IN ADVANCE AND BEST WISHES,

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Parthasarathi Loganathan (Expert) 01 January 2011
1. Neither Banking Regulations Act nor RBI Act has addressed this point. Indian Constitution Law is also silent on this aspect.
2. Repeated

s.subramanian (Expert) 01 January 2011
No such prohibition or bar is provided in the constitution in this regard. On the other hand,if any such bank is started, it can claim protection under Art.25 and 26 of the Constitution of India.

Arun Kumar Bhagat (Expert) 01 January 2011
I agree with experts.

M/s. Y-not legal services (Expert) 01 January 2011
Yes. No such prohibition in constitution and rbi act.

Chanchal Nag Chowdhury (Expert) 01 January 2011
1. The State cannot do it.
2.Private Banks may open subject to Banking laws. One must remember that Personal laws cannot extend to banking.

Shashikant V. Patil (Expert) 01 January 2011
You are at full liberty to establish the bank with respect to our laws of state and finance regulations of RBI. But the name you selected will attract very less customer in view of promoting the interest of business and to achieve your aim and goal.

DEFENSE ADVOCATE.-firmaction@g (Expert) 01 January 2011
Well all said above now no further permission is granted for any new bank. The new policy is under discussion.

Khaleel Ahmed Mohammed (Expert) 07 January 2011
Nothing wrong to establish a Bank as Per Shariath rules. The important object of Banking is interest. In Islamic system of Banking you can not impose interest to the borrowers and you can not pay interest to your depositors, how can you estabish a Bank with in Shariath law. Who will deposit the funds in your Bank.

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