Assistant Professor Sociology Wing, DDE,Annamalai University

Islamic Banking refers to a system of banking consistent with the principles of Islamic Laws or Shariat which prohibits the payment or acceptance of interest or riba for the lending or acceptance of money. The advocates of Islamic banking have been trying their best to propagate this concept over the years, yet there is no full- fledged Islamic bank currently working in India. Islamic banking is a distant dream in the world of Conventional interest based Indian banking. RBI and other legal institutions of India are not issuing license to banks to work as per the principles of Islamic banking due to several reasons. In order to set up Islamic banks in India, a lot of amendments need to be carried out in the prevalent legal set up. The main objective of this paper is to study the relevance of Islamic banking for the economic and social development of developing countries like India and finally conclusion has been provided whether Islamic banking is worthwhile to be persuaded in India or not. It has been concluded that Islamic banking has good prospects in India, given the diverse Indian canvas and holds good for India from a development point of view