A Study on Issues and Challenges Faced by Muslim Salaried People towards Investment in Present Scenario in Mumbai City

Abstract

Indian financial laws don't unequivocally deny Shariah banking however there are arrangements that make Shariah banking a practically unviable choice. Banks in India are represented under the Banking Regulation Act 1949, Reserve Bank of India Act 1934, Negotiable Instruments Act 1881, and the state and focal Co-agents Acts. Quite possibly the most recognizable highlights of these Acts is that they characterize Banking so that Banks can acknowledge stores from the public just for additional loaning. Various segments, for example, area 5 (b) and 5 (c) of the Banking Regulation Act 1949 restrict banks from contributing on benefit and misfortune sharing (PLS) premise. Further, area 8 of the Banking Regulation Act 1949 peruses, "No financial organization will straightforwardly or in a roundabout way bargain in purchasing or selling or dealing of merchandise." Besides India is among the nations which expressly give store assurance to banks' contributors up to an estimation of Rs. 0.1 million through the Deposit Insurance and Credit Guarantee Corporation (DICGC). Government additionally meddles on the resources side by requesting that banks give concessional credit to certain need areas. Some different elements that help in taking the sparkle of Islamic banking are the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) necessities. These together eat up around 30% of the banks' complete stores. Adding to this need area loaning leaves manages an account with next to no capital, which they can put resources into procuring non-interest pay. The nonappearance of danger free or high-grade venture protections and the strength of exchange financed, resource supported protections are of worry to controllers, as they undermine the installment framework and increment its weakness to chance and illiquidity. In this unique situation, it has been proposed that the idea of restricted banking be applied to Shariah banks. Fisher initially introduced the idea of thin banking, which is banking that works in store taking and installment exercises yet doesn't give loaning administrations. Dependability and security are accomplished if stores are put uniquely in momentary depositories or their nearby reciprocals. With regards to the Islamic monetary framework, Shariah banks don't approach moderately hazard free protections, for example, depositories.