'Policy Decision': J&K&L High Court Closes PIL Seeking Islamic Banking Window

The PIL filed by an NGO J&K Peoples Forum in 2018 had sought directions upon the union Finance Ministry for issuing necessary notification for the introduction of Sharia compliant windows (Islamic banking) as recommended by Deepak Mohanty Committee as well as in the light of a report of the inter-departmental group of RBI. The Forum also sought direction to RBI for taking immediate steps in the constituent banks including the J&K Bank so as to facilitate Shariah compliant windows.

In its plea the forum also sought indulgence of the court to pass directions towards J&K Bank Limited to place before the court entire details of non- performing accounts (NPAs) and the steps taken for recovery of the outstanding amount in NPAs, saying the same is public money which cannot be allowed to be misappropriated either by the account holders or by the management of the bank.

The Forum said since the respondents have failed to adhere to the reports of their own committees and expert groups in materialising the recommendations for creation of Shariah Compliant windows, it was left with no other option but to seek intervention of the court.

The petitioner further submitted that "majority of the citizens in Jammu and Kashmir are Muslims by faith and thus have a constitutional right to enjoy all avenues of development provided the same do not contravene the article of their faith."

The Forum also submitted that even the United Nations has acknowledged the role of Zakat in supporting the Sustainable Development Goals (SDG).

The bench after hearing both the sides observed that a counter affidavit has been filed on behalf of the RBI and it has been stated that in the year 2013, Ministry of Finance, Government of India had requested the RBI to give its opinion on introduction of Islamic Banking in India. An inter-departmental group was constituted under the chairmanship and one Rajesh Verma to examine the feasibility of introducing Islamic Banking in India.

The government vide its letter dated 21-3-2017 specifically conveyed its decision that Islamic Banking is not feasible and Shariah Banking Window cannot be opened.

The bench further observed that the above decision of the government is a policy decision which is beyond the purview of judicial review more particularly in a public interest petition.