Islamic Banking as Alternative Financial Inclusion in Kashmir

Copious quantity intelligences would contemplate that the Muslims are not acceptable by their religion to pamper in usury or usury activities. Since our financial arrangement is based on usury mechanism, Muslims cannot freely participate in it. This is definitely true, especially when the Muslim jurists consider the prevailing system unacceptable to the Shariah (the Islamic law). The only alternative available would be to avoid having anything to do with usury. The question is, would there be any viable alternative? Of course, since the establishment of the Islamic banking in the different parts of world, where in all modes of financing conducted by the bank have been successfully done without usury. Recent assumptionspropose that India will be home to the largest Muslim population globally by 2050, surpassing even Indonesia. In light of India’s growing Muslim population and subsequent need to address their financial needs. Jammu and Kashmir having 68% Muslim population where the Islamic Banking can play as operational role module in economic operation and grooming economic growth. Since the constitutional obligations (RBI 1949 Act) are some of the rulings in the practical operations, but the tale side of the constitution mentions a provision for the Non Banking Financial Companies which is a positive room for its practicality in Jammu & Kashmir. Islamic Banking works from the premise of partnership and equity rather than purely making profit from people. To make this work, trust and cooperation between all partners is required as returns are generated often more slowly and will need to be accrued over time. While in conflict situations this trust can be disrupted, equitable partnerships between Islamic financial institutions and their customers tend to be more resilient. The recent disaster and crisis in Kashmir economy really demand for the economic inclusion which could recover and uplift the financially downtrodden Kashmir’s. The circulation of wealth and Profit loss sharing concept of Islamic Banking will awaken the masses under the economic unisonous slumber. Islamic banking the intellectual economic debate of the prevailing era had dominated both the peripheries; theory as well as practice through-out the globe prominently in Gulf nations and western nations. Modern both Muslim Economists and Western financial experts decreed over the alternativeness of Islamic banking and as an athletic resolution to overcome the economic cries. It is mostly narrated in the modern days that major percentage of Muslims are marginalized. The 95% Muslim Population of Kashmir among which pre-eminent section is far away from modern banking system because of its Ribah (Usury) meticulously verboten by Qur’an. Modern banking system is both ethically and economically a hazardous; stated by the comparative study of both the systems. Kashmiri business class also desire for an alternative banking system; here the preferable economic management is visible since the decades. Major creditors (includes awakened Muslims from the set back of economy) to the modern banks established in Kashmir are passing through the intentions for vacating from the usury banking system.
Religious conscious individuals among the Muslims in Kashmir are keenly looking for the system which in the future extent all the financial stabilities. Islamic banking is an analytical profitable economic system which is free from any bias, creed, region, and religion. Muslims are not only to perform any set of their religion but to implement weather a minute part of Islam. Economic institutionalization; the might of the day is in need to revive in Kashmir which will secure the state from the threats of future capitalistic supremacy. The prominent feature of Islamic banking is circulation of money not the control of few over all the economic order. The system in Kashmir has an open market but the lack of education and benevolence of this shariah based economic system had masked its practicability. Kashmir the hub of intellectuals, experts and institutions must focus the said system and must think the ways for its entry in curriculum; So that the surviving generation of Kashmir could lay the firm foundation for its success in various forms such as the reduction of unemployment (a measure issue in Kashmir). Various federations should be designed for the micro establishment of Islamic banking in Kashmir by taking the examples of Kerala, Maharashtra and various other Micro-economic institutions running in the country. The Non-banking Finance Corporations, Investment Alternative Credits should be introduced for the economic deprived section of Kashmir. A sound representation from Kashmir should involve for the amendment of Indian constitution for the official performances of Islamic Banking.
( The author is Assistant Professor -Islamic Studies at J&K Government’s Higher Education Department)