Explaining the working of Islamic bank, Raqeeb said it is a interest-free banking based on Islamic law, Shariah. In this system, the depositor and bank will come to an agreement wherein both the parties will share the profit or losses at the end of the year. The bank will invest in stocks, bonds, infrastructure projects and so on. If the loss arises, the shareholders of the bank will absorb the loss. In the case of lending, the banks will not charge any interest but levy a service charge. Overdrafts are provided, subject to a maximum, free of charge.

“Islamic banking can revolutionise the micro-finance sector in the country and become a boon for the debt-ridden farmers in Maharashtra,” said Dr Ausaf Ahmed, a retired official of Islamic Development Bank, Jeddah.

Commenting on the international scenario, Talha said Islamic banking across the world is a $300 billion industry spread over 35 countries. MNC banks like Citibank, Grindlays, HSBC, ABN Amro and Sache banks are offering Islamic banking products. Even home-grown banks like ICICI and Kotak Mahindra Bank are offering Islamic banking products in the West Asia.

Islamic Market Index of Dow Jones has launched over forty Islamic indices. FTSE, London also offers Islamic indices in US, Europe, the Pacific and South Africa.