Experts devise e-currency system for Islamic banking

Tribune News Service

Jaipur, August 19

A team of experts in Rajasthan has devised a progressive and innovative e-currency system for making the interest-free Islamic banking by creating an income cycle with the capacity to rotate itself and infinitum.

After a committee of RBI on “medium-term path for financial inclusion” recommended the opening of interest-free windows in the existing conventional banks earlier this year, Jeddah-based Islamic Development Bank is set to launch its operations in India by setting up its first branch in Gujarat, claims a the team head, and expert of accountancy and economic affairs Ashish Sharma said here.

The software and hardware model operated through a system will also get asset and service backing, Sharma who has worked on this concept for the past 13 years, said. The new e-currency system can ensure successful operations of Shariah-compliant banking in India, besides addressing the pressing issues of economic recession, hyper-inflation and cash crunch, Sharma said.

Designed as an electronic currency machine (ECM) for banking through digitisation of money, he said this foolproof and secure system for instant money transfer could be used for interest-free transactions, risk sharing, asset and service backing and contractual certainty.

“Digital Islamic banks hold the potential for making a turnaround in the nation’s economy. Extending digital loans instead of exhausting the paper currency reserve will enable these banks to use their reserve without any limitation for any number of times, promoting the welfare and development of targeted groups,” said Sharma.

The team comprising software and hardware engineers and economic expert suggested that the interest-free banking establishments could charge fee from customers after providing them with the services of experts for gainful utilisation of loans for entrepreneurship.

While affirming that the introduction of ECM for interest-free windows in the conventional banks would prove to be a revolutionary step, Sharma said the Islamic banks could give interest-free advance any number of times to their customers without affecting their own solvency.