PROSPECTS, PROBLEMS AND POTENTIAL OF ISLAMIC BANKING IN INDIA

The modern Islamic banking is about only five decades old but has gained significant interest in almost all parts of the world. Today, Islamic banking has become one of the fastest growing segments of the international banking and capital markets. The spread has been more in the last ten years, especially after the global financial crisis of the previous decade, primarily because Islamic banks were found to be more stable and less susceptible to crisis. Another reason for its growth is to attract investments from the Middle-East and Gulf countries besides demand from the muslim population. Islamic banking has found its way right from the developed western world like the United Kingdom to the Asian giants like Japan and China. The paper attempts to lay emphasis that India too needs to accommodate Islamic Banking. If India continues to shy away from Islamic banking it will lose huge potential investments. The paper highlights the benefits of introducing Islamic banking in India and also identifies the hurdles in the way of Islamic Banking in India.