The decades of 2000 onwards may be facilitating entry for Islamic financial Products

in India through Stock market, investments, Venture Capital finance, micro-

credit/finance and lastlySukuks.
9: Suggestions and Recommendations

Experiences of the Islamic NBFCs in India underscore at least two points: (i) Internally, Islamic

NBFCs should be well capital adequate besides being highly cautious in their business operations and

(ii) In a secular democratic country like India there is need for some sort of advocacy groups that work

quietly in creating soothing conditions for Islamic oriented businesses.

Islamic financial institutions constantly need to diversify their investment basket through

innovations and improvement in technology. In a secular country like India it could be difficult due to

non-recognition of Islamic principles but nevertheless they are important and need to be conveyed to

the regulators through all the legal means.

Self imposed moratorium on certain qualified modes of finance by certain Islamic finance

house instead of increasing the reputation led to isolation and lopsided investments. Therefore, more

flexibility is needed to cope with the changing business environment. Lack of the lender of last resort

has been a major cause of concern for Islamic financial institutions the worldwide. Therefore, the

establishment of any such institutions that could act as the lender of last resort should be the topmost

priority by Islamic economists and policy makers.

Another issue that needs immediate attention of the policy makers is to put a check on

tainted profit seekers who just fore the sake of their small profit vitiate the whole environment for

genuine concerns. Many institutions that operate on the basis of interest disguising them as an Islamic

financial alternative, either overtly or covertly, only help in creating a crisis of confidence. People also

need to be informed about the Islamic finance principles so that at the time of crises they do not create

unnecessary panic and rumors leading to contagion.

****

*Shariq Nisar, Ph.D. Economics, is Joint Editor Islamic Economics Bulletin, India and works as consultant. He has

worked in the banking sector in various capacities. E:shariqnisar@yahoo.com; M;91-9980355403

*Syed Kamran Razvi, Legal consultant, and is also Director, Miftah Advisory India P Ltd. e:s krazvi@gmail.co

m m:91-9810078799 f: 91-11-41734987 a: Flat No.7,137B/12, Zakir Nagar, New Delhi-25

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