No Islamic Bank has been provided license in India: RBI
In reply to an application filed under Right to Information (RTI) Act, the Reserve Bank of India (RBI) has explicitly mentioned that it has not given permission to any financial institution to run an Islamic Bank in India.
The issue arose over the name of a state sponsored organization Cheraman Financial Services Limited (CFSL), which was granted a Non Banking Financial Institution (NBFI) status by the RBI. The CFSL had a prefix of ‘Sharia-Compliant’ with an approach of interest free financing. While zero percent financing was banned by RBI amidst claims of fraudulent activities like collection of interest in the form of commission, processing fee, service charges etc., The words ‘Sharia-compliant’ was removed from the home page of the website but does find a mention in their website’s ‘About Us’ section.
It is noteworthy to mention that the Kerala State Industrial Development Corporation (KSIDC) is a prominent promoter of the institution with an 11 percent share of equity.