HC closes PIL on opening of Islamic Banking in J&K

Representational Photo
Representational Photo

Srinagar, July 26: Underscoring that it cannot enter into the realm of policy decision of the Government, the High Court of J&K and Ladakh closed a Public Interest Litigation(PIL) seeking introduction of Islamic Banking in Jammu and Kashmir. The PIL was filed in 2018 by Jammu and Kashmir People’s Forum— a non-government organisation.

A division bench of Chief Justice Pankaj Mithal and Justice Javed Iqbal Wani, closed the PIL , observing that it was “policy decision” by the government that Islamic Banking was not feasible and Shariah Banking Window cannot be opened.

“The decision of the Government is a policy decision which is beyond the purview of judicial review more particularly in a public interest petition,” the bench said, adding, “The Court cannot enter into the realm of policy decision of the Government.”

However, the court said that in case anybody including the petitioner was aggrieved by the policy decision, he may take appropriate steps to challenge it before the proper forum. The Court subsequently closed the PIL in view of the policy decision.

The PIL filed by Jammu and Kashmir People’s Forum in 2018 was seeking directions to the Finance Ministry, Government of India, to issue necessary notification for introduction of Sharia Compliant Windows as recommended by Deepak Mohanty Committee. It had also sought directions to the Reserve Bank of India (RBI) to take immediate steps including the J&K Bank limited to “facilitate Shariah Compliant Windows”.

In response to the PIL, the RBI stated that in 2013, the Ministry of Finance had requested it to give its opinion on the introduction of Islamic Banking in India. The RBI said an interdepartmental group was constituted under the Chairmanship of one Rajesh Verma to examine the feasibility of introducing Islamic Banking in India. The committee, RBI said, declined to introduce Islamic Banking. However, it said, the Government appointed another committee headed by Deepak Mohanty in the year 2015 to look into the aspect. The committee submitted the report to the Reserve Bank of India on 28.12.2015 and made certain recommendations permitting interest-free banking in certain respects. Nevertheless, the RBI said that the report was not accepted by the Government.

“The Government vide its letter dated 21.03.2017 specifically conveyed its decision that Islamic Banking is not feasible and Shariah Banking Window cannot be opened,” the RBI said and placed the communication of the Government dated 21 March 2017, on record with the counter affidavit filed by it.

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