Friday, September 30, 2011

Jan Lokpal Bill: A Critique

By A. Faizur Rahman,
The Jan Lokpal Bill (JLB) imbroglio continues to intrigue the nation with Constitutional experts who deposed before the Standing Committee on September 24 & 25 warning that its provisions are unconstitutional and Anna Hazare threatening to gherao the houses of the Standing Committee members who do not support it, even urging voters not to re-elect such MPs. But the paradoxical aspect of this brouhaha is that most people who have taken up positions in support of the JLB haven’t read it. Mr. Kejriwal unwittingly conceded this in an interview; “When we conducted referendums on the JLB, we used to try and explain its contents to people. But they said they did not want to understand the details. They just wanted to put a mohar [stamp] on Anna” (
This essay therefore seeks to analyse the JLB and question the adamantine belief of the Hazare camp that their Bill is the singular, unalterable law that would eradicate corruption in India.
The biggest shortcoming of the JLB, as pointed out by many experts, is that it has been drafted on the presumption that an “act of corruption” will be committed only by a “Government Servant” which includes “any judge.” This is evident from partial inclusion (in Sec. 23(3)) of “business entities” and the total exclusion of NGOs, media and other similar categories of institutions from the ambit of the JLB. And interestingly, section 23(1) proposes a maximum punishment of life imprisonment for corrupt public servants. Whereas as per Chapter VI titled “Accountability of Officers of Lokpal” the punishment for a Lokpal member found guilty of corruption is just “dismissal, removal or reduction in rank.” The bias is obvious

Then there is the questionable selection process. Sec. 4(6) to (9) states that the Chairperson and members of the Lokpal shall be selected by a Selection Committee “from out of a short list prepared by the Search Committee” consisting of 10 members, five of whom will be selected by the Selection Committee and who will in turn co-opt the other five from the “civil society” through consensus. But as “civil society” itself is not defined, it leaves the door open for members of communal organisations to infiltrate into the Search Committee and infuse a sectarian or religious bias into the selection process. After all, many such faces were visible at the Ramlila Maidan during the Hazare fast.
Moreover, why should a high power Selection Committee (which consists of the PM, the leader of the opposition, judges of the Supreme Court and CJs of the High Courts, the CEC and CAG of India) be made dependent on a lesser ranked Committee which has not been secured against infiltration? It makes no sense. Therefore, the idea of a Search Committee is superfluous and must be dropped.
Another unwarranted clause is Sec. 17 which proposes that a 7-member Lokpal Bench will give permission to prosecute high functionaries such as the Prime Minister or any of his Council of Ministers, any judge of the SC or HC and any MP. The drafters of the JLB would be deluding themselves if they believe that Sec.17 would remove the impediments in prosecuting high ranking public servants. On the contrary, this section would further complicate the issue as it proposes seven persons in place of the present system of one person (such as the PM or the Chief Justice of India) for granting sanction to file an FIR against a Minister or a Judge. The question is; how does it simplify matters to bring in seven persons in place of one? A better remedy would be to do away with the system of seeking permission completely.
Apart from this, Sec. 4(4), which lists out persons not eligible to become Chairperson or member of the Lokpal, needs to be modified to exclude any person who is, or has been, a member, sympathiser, associate or supporter of any communal organisation or person. A clause should also be added to Sec. 11 to remove any Lokpal member including the Chairperson if he is found guilty of praising, supporting or sympathising with organisations or persons known for their communal bias. This is the only way of allaying the fears of a section of the society which suspects that Hazare and his team are backed by the communal outfits.
The JLB also contains some provisions that could make the Lokpal a heavy-handed parallel oligarchy. For instance, Sec. 7 grants to “Investigating Officers” and members of Lokpal the combined powers of a Police Officer, director of enforcement and a civil court. And as per Secs. 8 & 29(12) Lokpal has the powers “to approve interception and monitoring of messages” transmitted through telephones, internet or any other medium.
Furthermore, Sec 12, seeks to circumscribe the powers of the High Court under Art. 226 of our Constitution by stating that the HC cannot “ordinarily” stay the orders of the Lokpal and if it does, it will have to decide the case within two months, “else the stay would be deemed to have been vacated after two months and no further stay in that case could be granted.” According to H. M. Seervai (whose seminal work Constitutional Law of India led to the development of the "Basic structure doctrine", that inhibits politically-motivated changes to the Constitution) “any law that took away or abridged the powers of the High Courts under Art.226 would beultra vires, for the powers to make laws is subject to the provisions of the Constitution [as per Art.245].” Yet it is being claimed that all provisions of the JLB are within the legislative competence of Parliament.
The behemothic nature of the institution that the JLB seeks to create can also be gauged from its huge annual budget which Sec. 26(2) assures will be kept “less than ¼ % of the total revenues of the Government of India.” The total estimated revenue of India for 2011-12 (assuming “total revenues” refers to total revenue receipts) as projected in the last budget ( is Rs 7, 89, 892 crores. ¼ % of this works out to nearly 2000 crores which the Lokpal will have access to without “any administrative or financial sanction from any government agency.” An explanation from the drafters of the JLB is in order as to why such a huge amount of money is required for an institution which according to “Team Anna” is not going to be flooded with thousands of complaints.
Anna Hazare is certainly right in demanding a strong law against corruption. But he must also understand that in a democracy no law can be passed without proper debate, and therefore, it would be most unfair on his part to pressurise the MPs into voting only for the JLB. If indeed he and his team are confident of the genuineness of the JLB they must be willing to openly discuss it with those who challenge its constitutionality.
[A slightly different version of this article appeared in the DNA on September 27, 2011]
(A.Faizur Rahman is the secretary general of the Chennai-based Forum for the Promotion of Moderate Thought among Muslims. He may be reached at

Deccan Herald

Friday 30 September 2011 

Of 269 officers indicted, 54 died during trial
215 held guilty in TN mass rape case
Chennai, September 29, DHNS:

In an unprecedented judgment in the annals of Indian legal history, 215 government officials were on Thursday convicted for the infamous Vachathi incident in Tamil Nadu’s Dharmapuri district where tribal women were assaulted and raped.

This is perhaps the largest number of officials from police, forest and revenue departments convicted and sentenced to jail terms ranging from one to 10 years for atrocities on women during a raid for smuggled sandalwood on the remote Vachathi village.

While a total of 269 officials were charge-sheeted in the case for the violent incidents, which took place way back in 1992, 54 have died during the nearly 20-year-long trial.
All the remaining 215 accused in the mammoth case  were charged under various IPC sections, including torture and sexual abuse against tribal women, and held guilty by the Dharmapuri Principal District Judge S Kumaraguru on Thursday.

The judge handed down a maximum of seven years rigorous imprisonment to 17 forest department officials for violence, torture and rape, even as 10 of those accused were also sentenced to additional 10 years of imprisonment. The sentences are to run concurrently.

Four Indian Forest Service officials were sentenced to varying jail periods ranging from nine months to one year in the case, the investigation of which was handed over to the CBI in 1995. The convicted also included 84 state police officials, even as 150 officials from different departments have been sentenced to a two-year jail term.

Except for the 17 convicted and sentenced for torture and rape, all others were released on furnishing a personal bond. The judge gave all of them a month’s time to appeal in the Madras High Court.
The prosecution had made out the charges on 19 counts,  including offences like “causing disappearance of evidence”, “wrongful confinement” and “unlawful assembly.”
Each of the 18 RPT, 18  victims are to be paid a compensation of Rs 15,000 from the fine amount, the judge ruled.

Fact file

* Brutal assault and rape on tribals took place in Vachathi village in Dharmapuri district on June 20, 1992.
* Accused belonged to police, forest and revenue departments.
* 18 tribal women were raped and over 100 assaulted.
* Apart from rape, assault, the other charges were of atrocities against tribals
* Of 215 sentenced, 125 belong to forest department, 84 are policemen and five are revenue officials.
* Govt officials raided suspecting the villagers were hiding smuggled sandalwood.

Return to frontpage

U.S. man charged with plot to bomb Pentagon

While drone strikes have thus far been the bane of militants residing in the remote tribal belt of Pakistan, this week they were almost deployed to take out the Pentagon and the Capitol.
The U.S. Federal Bureau of Investigation announced on Wednesday that Rezwan Ferdaus (26), a U.S. citizen from Ashland, Massachusetts, had been charged in connection with a plot to destroy the key federal government buildings using large radio-controlled F-86 Sabre aircraft filled with what he thought was C-4 plastic explosive.
Ferdaus, said to be a graduate of Northeastern University, was also charged with attempting to provide material support and resources to al-Qaeda with the aim of facilitating attacks on U.S. soldiers overseas; attempting to destroy national defence premises; and attempting to destroy buildings owned by the U.S. using explosives.
According to a cooperating witness in an apparent sting operation by the FBI, Ferdaus stated in January 2011 that he planned to attack the Pentagon using aircraft similar to “small drone airplanes” filled with explosives and guided by GPS equipment.
Outlining his planned attack in chilling detail, Ferdaus told undercover officers: “With this aerial assault, we can effectively eliminate key locations of the P-building. Then we can add to it in order to take out everything else and leave one area only as a squeeze where the individuals will be isolated. They'll be vulnerable and we can dominate.”
In a statement, the FBI underscored Ferdaus' determination to execute his plan despite being presented with multiple opportunities to back out, including being told that his attack would likely kill women and children.
Instead, Ferdaus invoked the option of a Mumbai-style ground attack to complement the aerial strike, and reportedly told federal agents that once he isolated individuals in the two buildings into “one area only as a squeeze,” he would ensure that a six-man team armed with assault rifles would “open up on them” and “keep firing” to create “chaos” and “take out” everyone.
As part of the operation, conducted by more than 30 federal, state, and local agencies on the FBI's Joint Terrorism Task Force, agents supplied Ferdaus with an unspecified amount of “C-4 explosives,” an F-86 small drone aircraft, three grenades and six fully-automatic AK-47 assault rifles. In the course of the investigation, Ferdaus also delivered eight detonation devices to the undercover officers and a training video demonstrating how to make cell phone detonators.
At his final meeting with officers on Wednesday at which Ferdaus inspected the components, brought them to his storage unit and took possession of the entire inventory, he was arrested, the FBI said in a statement. It added that at no point in time was the public in any danger from explosive devices, which were controlled by undercover FBI employees.
No community targeted
Prosecuting officials were quick to dispel any notion that the sting operation against Ferdaus had targeted any larger community. U.S. Attorney Carmen Ortiz said: “I want the public to understand that Mr. Ferdaus' conduct, as alleged in the complaint, is not reflective of a particular culture, community, or religion.”
If convicted, Ferdaus faces a total of up to 55 years in prison for all three charges and a $250,000 fine.

Saudis Turn Mecca into Vegas

September 29, 2011 by  

Historic and culturally important landmarks are being destroyed to make way for luxury hotels and malls, reports Jerome Taylor
A general view is seen of the Grand Mosque during the Muslim month of Ramadan in the holy city of Mecca August 20, 2011.  Saudi Arabia has begun the biggest expansion yet of the Grand Mosque, to raise its capacity to 2 million pilgrims, the state news agency SPA said. 
REUTERS/Hassan Ali
Behind closed doors–in places where the religious police cannot listen in–residents of Mecca are beginning to refer to their city as Las Vegas, and the moniker is not a compliment.
Over the past 10 years the holiest site in Islam has undergone a huge transformation, one that has divided opinion among Muslims all over the world.
Once a dusty desert town struggling to cope with the ever-increasing number of pilgrims arriving for the annual Hajj, the city now soars above its surroundings with a glittering array of skyscrapers, shopping malls and luxury hotels.
To the al-Saud monarchy, Mecca is their vision of the future–a steel and concrete metropolis built on the proceeds of enormous oil wealth that showcases their national pride.
Yet growing numbers of citizens, particularly those living in the two holy cities of Mecca and Medina, have looked on aghast as the nation’s archaeological heritage is trampled under a construction mania backed by hardline clerics who preach against the preservation of their own heritage. Mecca, once a place where the Prophet Muhammad (s) insisted all Muslims would be equal, has become a playground for the rich, critics say, where naked capitalism has usurped spirituality as the city’s raison d’être.
Few are willing to discuss their fears openly because of the risks associated with criticising official policy in the authoritarian kingdom. And, with the exceptions of Turkey and Iran, fellow Muslim nations have largely held their tongues for fear of of a diplomatic fallout and restrictions on their citizens’ pilgrimage visas. Western archaeologists are silent out of fear that the few sites they are allowed access to will be closed to them.
But a number of prominent Saudi archaeologists and historians are speaking up in the belief that the opportunity to save Saudi Arabia’s remaining historical sites is closing fast.
“No one has the balls to stand up and condemn this cultural vandalism,” says Dr Irfan al-Alawi who, as executive director of the Islamic Heritage Research Foundation, has fought in vain to protect his country’s historical sites. “We have already lost 400-500 sites. I just hope it’s not too late to turn things around.”
Sami Angawi, a renowned Saudi expert on the region’s Islamic architecture, is equally concerned. “This is an absolute contradiction to the nature of Mecca and the sacredness of the house of God,” he told the Reuters news agency earlier this year. “Both [Mecca and Medina] are historically almost finished. You do not find anything except skyscrapers.”
Dr Alawi’s most pressing concern is the planned £690m expansion of the Grand Mosque, the most sacred site in Islam which contains the Kaaba–the black stone cube built by Ibrahim (Abraham) that Muslims face when they pray.
Construction officially began earlier this month with the country’s Justice Minister, Mohammed al-Eissa, exclaiming that the project would respect “the sacredness and glory of the location, which calls for the highest care and attention of the servants or Islam and Muslims”.
The 400,000 square metre development is being built to accommodate an extra 1.2 million pilgrims each year and will turn the Grand Mosque into the largest religious structure in the world. But the Islamic Heritage Foundation has compiled a list of key historical sites that they believe are now at risk from the ongoing development of Mecca, including the old Ottoman and Abbasi sections of the Grand Mosque, the house where the Prophet Muhammad (s) was born and the house where his paternal uncle Hamza grew up.
There is little argument that Mecca and Medina desperately need infrastructure development. Twelve million pilgrims visit the cities every year with the numbers expected to increase to 17 million by 2025.
But critics fear that the desire to expand the pilgrimage sites has allowed the authorities to ride roughshod over the area’s cultural heritage. The Washington-based Gulf Institute estimates that 95 per cent of Mecca’s millennium-old buildings have been demolished in the past two decades alone.
The destruction has been aided by Wahabism, the austere interpretation of Islam that has served as the kingdom’s official religion ever since the al-Sauds rose to power across the Arabian Peninsula in the 19th century.
In the eyes of Wahabis, historical sites and shrines encourage “shirk”—the sin of idolatry or polytheism–and should be destroyed. When the al-Saud tribes swept through Mecca in the 1920s, the first thing they did was lay waste to cemeteries holding many of Islam’s important figures. They have been destroying the country’s heritage ever since.
Of the three sites the Saudis have allowed the UN to designate World Heritage Sites, none are related to Islam.
Those circling the Kaaba only need to look skywards to see the latest example of the Saudi monarchy’s insatiable appetite for architectural bling. At 1,972ft, the Royal Mecca Clock Tower, opened earlier this year, soars over the surrounding Grand Mosque, part of an enormous development of skyscrapers that will house five-star hotels for the minority of pilgrims rich enough to afford them.
To build the skyscraper city, the authorities dynamited an entire mountain and the Ottoman era Ajyad Fortress that lay on top of it. At the other end of the Grand Mosque complex, the house of the Prophet’s (s) first wife Khadijah has been turned into a toilet block. The fate of the house he was born in is uncertain. Also planned for demolition are the Grand Mosque’s Ottoman columns which dare to contain the names of the Prophet’s (s) companions, something hardline Wahabis detest.
For ordinary Meccans living in the mainly Ottoman-era town houses that make up much of what remains of the old city, development often means the loss of their family home.
Non-Muslims cannot visit Mecca and Medina, but The Independent was able to interview a number of citizens who expressed discontent over the way their town was changing. One young woman whose father recently had his house bulldozed described how her family was still waiting for compensation. “There was very little warning; they just came and told him that the house had to be bulldozed,” she said.
Another Meccan added: “If a prince of a member of the royal family wants to extend his palace he just does it. No one talks about it in public though. There’s such a climate of fear.”
Dr Alawi hopes the international community will finally begin to wake up to what is happening in the cradle of Islam. “We would never allow someone to destroy the Pyramids, so why are we letting Islam’s history disappear?”
Prophet’s (s) Wife’s House
The house of the Prophet’s (s) wife Khadijah was destroyed and replaced with a public toilet block. After lengthy negotiations the site was briefly excavated with artefacts found dating back to the Prophet’s  (s) time.
Expansion of the Grand Mosque
In order to accommodate the ever growing pilgrim numbers, the authorities have begun a £690m expansion. Houses have been pulled, and it is likely the old Ottoman and Abbasi columns will also go.
The Prophet’s (s) Birth House
The building where the Prophet (s) once lived lies just a few hundred yards  from the Grand Mosque. Currently a library, the fear is that it could suffer the same fate as his wife’s house when the mosque expands.
Royal Mecca Clocktower
In order to build the clock tower and its surrounding skyscrapers–most of which house luxury hotels–the Saudi authorities approved the destruction of an entire mountain and the Ottoman Ajyad Fortress that lay on top.
Also under threat
Bayt al-Mawlid
When the Wahabis took Mecca in the 1920s they destroyed the dome on top of the house where the Prophet Muhammad (s) was born. It was then used as a cattle market before being turned into a library after a campaign by Meccans. There are concerns that the expansion of the Grand Mosque will destroy it once more. The site has never been excavated by archaeologists.
Ottoman and Abasi columns of the Grand Mosque
Slated for demolition as part of the Grand Mosque expansion, these intricately carved columns date back to the 17th century and are the oldest surviving sections of Islam’s holiest site. Much to the chagrin of Wahabis, they are inscribed with the names of the Prophet’s (s) companions. Ottomon Mecca is now rapidly disappearing.
Al-Masjid al-Nawabi
For many years, hardline Wahabi clerics have had their sites set on the 15th century green dome that rests above the tomb holding the Prophet (s), Abu Bakr and Umar in Medina. The mosque is regarded as the second holiest site in Islam. Wahabis, however, believe marked graves are idolatrous. A pamphlet published in 2007 by the Saudi Ministry of Islamic Affairs, endorsed by Abdulaziz Al Sheikh, the Grand Mufti of Saudi Arabia, stated that “the green dome shall be demolished and the three graves flattened in the Prophet’s  (s) Masjid.”
Jabal al-Nour
A mountain outside Mecca where Mohammed received his first Koranic revelations. The Prophet used to spend long spells in a cave called Hira. The cave is particularly popular among South Asian pilgrims who have carved steps up to its entrance and adorned the walls with graffiti. Religious hardliners are keen to dissuade pilgrims from congregating there and have mooted the idea of removing the steps and even destroying the mountain altogether.

Thursday, September 29, 2011

10 point programme for Islamic Banking in India!

H Abdur Raqeeb proposes 10 point programme for Islamic Banking in India. The following is the paper presented by the champion of Islamic Banking in the Islamic Investment and Finance conference on March 28, 2010 at India Islamic Cultural Centre in New Delhi
Banking institutions have emerged as very necessary for everyone, poor as well as rich. It is needed to deposit and protect the saving however meagre it may be.
Poor labourers, construction workers and others migrating to the urban centres of the country from remote corners must have access to banking to transfer their earning to the families in far off places. Besides, several social initiatives, welfare programmes and schemes of the government both state and central do require bank accounts of those targeted – below poverty line segments – to receive money safely in their account. Also credit is provided to people through banks. All these requirements make banking an inevitable part of life of today’s men and women.

But the stark reality is that even after forty years, since nationalisation of the banks about 60% population do not have access to formal banking and only 5.2 % of villages have bank branches. Marginal farmers, land less labours, oral lessees, self employed and unorganised sector enterprise, ethnic minority and women, Aam Aadmi of our great country continue to form the financially excluded class.

The financial exclusion of a large segment of the population has far-reaching implications for the socio-economic and educational uplift of the masses. These financially excluded classes would not hesitate in sharing a “return” on their investment but they often find it difficult to meet the demand of a pre determined return unrelated to the yield. If finance is available without the burden caused by pre-determined interest rates, it will be a welcome development for the marginalized and also especially for SME’s. Interest-free Islamic Banking can fill up this gap.

For Muslims, as per the Sachar Committee report based on census 2001 data, the percentage of household availing themselves of banking facilities is much lower in towns and villages where the Muslim population is high. This is due to a certain mindset prevailing in the banking sector which has categorized Muslims and Muslims dominated areas as ‘Negative Zones’ as documented in Sachar report. Prohibition of interest and thus for reasons of faith Muslims are away from the conventional banks as referred to in the report of the Committee on Financial Sector Reforms –CFSR of the Planning Commission headed by Dr. Raghuram Rajan

Interest Free Banking

In the absence of an alternative to the convention based on interest, in the state of Kerala where Muslims make up around 25% of the population of Kerala, which was 31.8 million according to the 2001 Census, it is reported that thousands of crores earned in interest is kept in suspended accounts, as believers do not claim it. Muslims both rich as well as those employed in the Gulf invest their money on gold and real estate which are not productive investments. They also indulge in lavish spending in marriages and other rituals and many of them fall into trap of bogus financial institutions lose their hard earned money.

Therefore there is a strong case to have an alternative system based on equity instead of the debt based banking system catering and caring to the unbanked segments more specially of the marginalized and minorities -particularly Muslims in the country

Government Initiative

RBI Working Group
In 2005, Government of India asked Reserve Bank of India to examine Islamic banking instruments and constituted a Working Group headed by Mr. Anand Sinha, Chief Manager, Department of Banking and Operation and Development along with senior Bankers from SBI, ICICI and Oman International Bank that came up with its report in 2006 which said: In the current statutory and regulatory framework it would not be possible for banks in India to undertake Islamic Banking activities and concluded that if the banks are allowed to do Islamic banking appropriate amendments are required in Banking regulations Act 1949.

National Workshop
After the GOI announcement that Islamic banking is not feasible in India, several interactive sessions were held by ICIF, one of them was a National Workshop on “Road Map on Islamic banking” in Sept 2006, which was participated by prominent National and International Islamic experts and bankers. It passed resolution that Islamic Banking is relevant in the 21st century and India may implement the same by obtaining inputs from the global example in UK, Malaysia and Singapore. It also chalked out a plan of action as well.

CFSR-Planning Commission Recommendation

In August 2007, Govt. of India under the Planning Commission constituted a high level committee on Financial Sector reforms (CFSR) under the chairmanship of Dr. Raghuram Rajan, former chief economist, IMF along with other eleven members who are the finest financial and legal minds in the country.
CFSR submitted its final report in Sept. 2008 to Prime Minister with the specific recommendation of interest free banking in the country:
“Another area that falls broadly in the ambit of financial infrastructure for inclusion is the provision of interest-free banking. Certain faiths prohibit the use of financial instruments that pay interest. The non-availability of interest-free banking products (where the return to the investor is tied to the bearing of risk, in accordance with the principles of that faith) results in some Indians, including those in the economically disadvantaged strata of society, not being able to access banking products and services due to reasons of faith. This non-availability also denies India access to substantial sources of savings from other countries in the region.

While interest-free banking is provided in a limited manner through NBFCs and cooperatives, the Committee recommends that measures be taken to permit the delivery of interest-free finance on a larger scale, including through the banking system. This is in consonance with the objectives of inclusion and growth through innovation. The Committee believes that it would be possible, through appropriate measures, to create a framework for such products without any adverse systemic risk impact.”(Chapter 3: Broadening Access to Finance, Page: 72)
Why Islamic Banking?

The collapse of leading Wall Street institutions, notably Lehman Brothers, and the subsequent global financial tsunami and economic recession, Islamic banking is seriously being considered and has emerged as a possible alternative to the conventional banking because of the followings:
• It is based on Ethical and Socially Responsible Investments (SRI)
• It aims at Equity and Justice and leads to poverty alleviation and
• It acts to new dimension to assets and actual projects aiming to support real economic growth instead of financial engineering.
• It provides services to under banked populations ignored by conventional banks

Efforts Undertaken – Meeting RBI & FM

When it was learnt that RBI is considering implementing a few recommendations of Dr. Raghuram Rajan Committee on Financial Sector Reforms (CFSR), ICIF contacted the Governor RBI and sought an appointment to plead for the case of the recommendation of CFSR regarding Interest-free banking. Accordingly a delegation of ICIF met the Deputy Governor Dr. K.C Chakrabarty on September 11, 2009 and presented a memorandum along with the important documents. RBI conveyed that it has no reservation regarding interest free banking but for that an amendment in the Banking regulations has to be passed in the Parliament which can be done by the Central government.

A memorandum was submitted to FM, Mr. Pranab Mukherjee to accept the recommendation of CFSR committee on interest free banking and suitable legislative amendment. Several meetings and interactions have taken place with the officials of the Finance Ministry and RBI in this regard till now.
In order to amend the Ranking Regulations Act 1949 and accommodate a level playing field for Islamic banking, a bill has to be passed in Parliament. For this, Banking Amendment Bill has been prepared and vetted by Dar Al Shariah, Dubai Islamic Bank and submitted to Parliament secretariat by an MP to be undertaken as a Private Member’s Bill in the next session of Parliament.

Kerala & Islamic Banking

Another significant development has taken place in the state ofKerala. Govt. of Kerala under
KSIDC (Kerala State Industrial Development Corporation) has taken a courageous and commendable step to form an Islamic Investment company named Al Barakah Financial Services Company, an NBFC after an exhaustive feasible report undertaken by a reputed international consulting firm Ernst & Young. This NBFC will be turned into a global Islamic bank as soon as the RBI accommodates it after an amendment in the Banking regulations. Dr. Subramaniam Swamy has submitted a petition in the High court to stop the participation of the Kerala Government. Admission of his petition has put a hold on the proceedings for the time being.


To bring Interest free Islamic Banking, misunderstanding and misinformation among the Muslim masses as well as non-Muslims have to be removed. The need and necessity of interest free Islamic finance and banking has to be spread among the Muslims, common people, religious scholars, business men, bankers, politicians, and other stakeholders.
• Among Muslims, criticism has been raised against the banking approach itself. Some allege that it is nothing but the changes of nomenclature only. Some other questions its capability to meet all the financial requirements of modern day economy. Some go further to say that the whole exercise is futile, with the macro level money creation process remaining the same, what is attempted through so called innovative products is nothing but a cosmetic touch and even in international arena, Islamic banks have to price their investments on Global standards like London Inter-bank Offered Rate (LIBOR) which are essentially interest based. These issues have to be addressed properly by the Islamic scholars, finance experts and those who campaign for Islamic Finance and Banking.
• Justice Mufti Muhammed Taqi Usmani, Chairman, AAOIFI (Accounting and Auditing Organisationfor Islamic Financial Institutions) mentions in his famous book titled ‘An introduction to Islamic Finance’:

“Islam, being a practical way of life, has two sets of rules: one is based on the ideal objectives of Shariah which is applicable in normal conditions, and the second is based on some relaxations given in abnormal situations. The real Islamic order is based on the former set of principles, while the latter is a concession which can be availed at times of need, but it does not reflect the true picture of the real economic order.

Living under constraints, the Islamic banks are mostly relying on the second set of rules; therefore, their activities could not bring a visible change even in the limited circle of their operations. However, if the whole financing system is based on the ideal Islamic principles, it will certainly bring a discernible impact on the economy”. (Page 24)
• In the plural and secular country like ours, misunderstanding among majority community has to be addressed; Islamic banking is not just for Muslims. It is only a mechanism for financing business without providing debt. It is also to be focused that it is based on ethics and Socially Responsible Investment (SRI). It has to be show cased that 40% customers in Islamic banks in Malaysia are Chinese of other communities and also in UK, 20% customers are Non Muslims.
Ms. Perrine Fiorina of CELENT, Strategy consulting for financial institutions, talks of ‘Promising Future of Islamic Banking’ thus:
“In addition to the large and untapped Muslim population, Islamic Banking is currently beginning to attract Non-Muslim customers, who are interested in alternative way of banking. Indeed, a growing number of Non-Muslims are turning to Islamic Banking as customers spooked by turmoil in the western banking system increasingly see the sector as a safe and more connected to the real economy. In my opinion, Islamic banking will benefit from this new customers interest and grow even more quickly than it recently did”.
Even Vatican has offered Islamic Finance principles to Western banks as a solution for worldwide economic crisis. “The ethical principles on which Islamic Finance is based may bring banks closer to their clients and to the true spirit which should mark every financial service” the Vatican’s official newspaper, L’ Osservatore Romano said.
Recently, France has amended its laws to issue SUKUK –Islamic Bonds based on assets-of one Billion Euro.
• Post 9/11, oil money has stopped being invested in U.S and is looking for a safe investment destination, and India could well be that destination given its safe economic scenario, huge market, skill and educated labour and good growth rate.
• Among the intellectuals, scholars and politicians, a doubt is lurking in the mind whether banking operations are feasible without the base of interest.
• As Dr. Hussein Hamid Hassan, Chairman, Shariah Board, Dubai Islamic Bank has said “Conventional banks have since inception, had only one product, that is loan with interest, Shariah has unlimited products to suit every customer and every project under any circumstances”.
Various products with Arabic words have to be suitably presented in the prevailing banking terms and the reasons why they are preferable to the conventional banking products and practices provided as they are based on real economy rather than financial engineering in conventional banking has to be suitably highlighted.
Modern, secular and industrialized countries like Britain, Singapore, Hong Kong and Japan have become hub of Islamic finance and banking. If London, Tokyo, Singapore and Hong Kong can become hub and house of Interest free Islamic finance and banking Why not Mumbai and Cochin?
10-Point Programme of Action

A 10-point programme of action is suggested to this august house for consideration and serious follow up to make the dream of Islamic Finance and Banking become a reality which will change the face and fortune of the community as well as the country, if Almighty wills.
  1. Interest free Islamic banking is emerging as a possible alternative to conventional Finance and Banking – Know why?
  2. Start discussion in our circle & make it an integral part of our all programmes.
  3. Bring out special issues and supplements in the print media, create space for discussion in electronic media, usage of internet to share the latest development & progress.
  4. To remove Misconception among Non-Muslims that interest-free banking is not only for Muslims, a group of strong supporters among them- Abu Talibs has to be included in our efforts to spearhead this great cause.
  5. Create awareness among Muslim Scholars, Students and the General Public by using Jum’a Sermons, Conferences, seminars, etc.
  6. Human Resource Development – Skills & Spirits, Competence & Character specific to Islamic Shariah – Fiqh ul Muamilat and modern finance and banking has to be produced.
  7. General awareness in Media – lobbying for Islamic Banking, Takaful – Islamic Insurance, Sukuk – Islamic Bonds.
  8. Conduct seminars & symposium – Contact B-Schools, Professional associations, etc.
  9. Create political will – contact & convince MPs of all parties to enable amending Banking Regulation act, 1949 in Parliament.
  10. Planning for Islamic Micro finance & Mega Private Islamic Banks when permission granted.

Terrorism,Muslims and Media bias


What is rarely visible in the Indian media, however, are the brutal, illegal methods used against suspected terrorists: torture cells, illegal detention, unlawful killings in “police encounters”; elimination of evidence against the illegal actions of the law-enforcing agencies; and rampant harassment of Muslims. In July 2009, The Week reported on the existence of at least 15 secret torture chambers meant to extract information from the detainees. The methods to extract information include attaching electrodes to a detainee’s genitals as well as the use of pethidine injections. To quote The Week, these chambers are “our own little Guantanamo Bays or Gitmos”, which a top policeman called “precious assets”.

In May 2008, a Muslim boy aged 14 was abducted by the Gujarat police. He was dragged to the police car at gunpoint and taken to a detention centre where he was tortured. He returned home ten days later when the court ordered his release following his mother’s petition. The police subsequently threatened the boy’s family with dire consequences if they pursued the case in court. The police harassment becomes even more acute in light of the fact that most lawyers often hesitate to take up the cases of “terrorists”. As a disempowered community - as the government-appointed Sachar Committee report (of 2006) minutely demonstrates - Muslims themselves don’t have adequate and qualified lawyers to pursue such cases. Muslims’ marginalisation thus renders their voice invisible in the media too.

It is believed that after SIMI was banned, soon after 9/11, its radical members formed IM. During my fieldwork (2001-2004) on Jamaat-e-Islami and SIMI I did not hear anything about IM. SIMI activists and other Muslims I met felt terrorised themselves. It is worth noting that since 2001 far more people have been arrested as “SIMI terrorists” than the actual number of SIMI members, which in 1996 was 413 (when founded in 1976, SIMI’s members numbered 132). Until today, the Indian government has still not legally proved its rationale for banning SIMI.
In the fight against terrorism, evidence and the rule of law are subservient to prejudice. As of this writing, the Indian government has not yet tracked the perpetrators of the July 13 attack. However, only two days after the attack, Subramanian Swamy, a prominent politician and former minister (with a doctorate from Harvard University) wrote an article called “How to Wipe Out Islamic Terror”. Without any evidence, he blamed Muslims for the attack, in the same way that The New York Times, The Washington Post, and The Sun suspected Muslim involvement in the Norway shooting nine days later.

What Swamy did is standard practice in Indian media. In September 2006, a blast killed 35 people at a Muslim graveyard in Malegaon (in the state of Karnataka). The media blamed Muslims. Likewise, in 2007, after a blast killed 10 Muslims praying in Hyderabad’s Mecca mosque, Praveen Swami freely wrote about the Muslim terrorists he believed caused it and about what he perceived to be the “Islamist threat to India’s cities”. However, investigations later showed that Hindu nationalists carried out the Malegaon and Mecca mosque terror attacks.

Returning to Subramanian Swamy, Swamy wrote: “We need a collective mindset as Hindus to stand against the Islamic terrorist. The Muslims of India can join us if they genuinely feel for the Hindus. That they do I will not believe unless they acknowledge with pride that though they may be Muslims, their ancestors were Hindus”. Those refusing to acknowledge this, Swamy advocated, “should not have voting rights”. He proposed declaring India “a Hindu Rashtra [state]”.

Stories of Muslim terrorists abound in both the Indian and Western media.
 Since the July 13, 2011 Mumbai bombings, vitriolic pieces like Subramanian Swamy’s have appeared frequently in the media. These pieces subtly influence the analyses of many liberal intellectuals. By contrast, stories portraying Muslims as the terrorised remain fairly sparse. One wonders if, and how, such stories will be told
Irfan Ahmed in Al Jazeera.