Islamic Banking as a Medium of Inclusive Growth in India:Issues and Opportunities

Abstract

A well developed banking system is a prerequisite for the smooth and effective functioning of an economy. During the last few decades, great changes have taken place in the Indian financial system. The most significant changes are deregulation of Indian banking sector, entry of new banks, and internationalization with the objective of increasing competition and taping new growth opportunities. Islamic banking a popular global phenomenon is now being introduced in India along with conventional banking.This study is carried out to establish the relevance of Islamic banking in India with special reference to present regulatory and market scenario. The study has suggested a structured introduction of Islamic banking and further seamless integration into mainstream banking in India. The paper makes an attempt to explore the background and issues of Islamic banking in India’s economy. The analysis of
implications and an assessment of the benefits and viability of Islamic banking as potentially a genuine alternative to a formal conventional banking system in India have been done