Between faith and fraud: Why Islamic banking is back in focus

Halal financing, Islamic banking, Muslim, India, IMA, Scam, Legalisation, RBI, the federal, english news website
Is it time India legalised Islamic banking?

Until two years ago, Mahaboob Shaik (name changed) owned a garment factory that employed 53 people. But the government’s shock banknote ban in November 2016 and the July 2017 implementation of the Goods and Services Tax wrecked his business. In late 2017, Shaik shut his factory in Bengaluru’s Peenya industrial area and laid off all the workers. Then, he took a leap of faith.

Now, the 36-year-old is teetering on the brink again.

After shutting the factory, Shaik invested ₹20 lakh in Bengaluru-based I Monetary Advisory (IMA). The non-banking finance firm founded in 2006 claimed to offer so-called ‘halal’ investments or financial products compliant with the Islamic law of Shariah. “I was sceptical to invest at first, so both my wife and I initially invested ₹1 one lakh each. After getting the promised returns for three months, we invested ₹5 lakh each again, and further put in another ₹8 lakh after six months,” Shaik says.

Earlier this month, IMA went bust, leaving Shaik and thousands of other investors angry and scarred.

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