0% interest

For Sharia Banking System

  1. In Sharia Law, money is supposed to be intrinsic, and no interest charges are supposed to be levied on money lending. This can form a separate law on Islamic Banking System.
  2. The Islamic Bank can form a bridge between government, company and lenders in a 3-1 tier system, where a zero percent financing is levied on every customers.
  3. In Sharia Law in Islamic Banking, interest against principal is not charged. EMIs, Loans levy zero charges.
  4. Charges can be levied on the time-line of moratorium period. Pre-Payment will fetch a time-line before the payment, which can be hedged against a loan versus a loan for a greater moratorium period.
  5. The third party can collect transactions charges levied on the principal amount for company and bank lending.
  6. Interest on the difference of a moratorium period can create interest charges for a gap on the timeline.  Deferral and accrual can create a loan against loan for exchange terms.
  7. Infrastructure lending can have a 2-3 % less percentage than normal loan period. Varied interest charges can be levied for infrastructure lending. Slab pricing can be kept for differential interest. A spread can be used as well for differential interest.
  8. Interest rates can vary with timeline as well. A 6-month loan can have a different rate of interest than an 1-year and 2-year period loan.
  9. The segments within the BPL can be named as ABPL and BPL. Advanced BPL can be a segment much lesser than the poverty line.
  10. BPL segment can be defined in the range of 1250-1500 INR per month, with a daily expense pegged at INR 50.
  11. Zero profit booking can happen in some companies. New laws can be enacted for maintaining Sharia Laws.
  12. There can be a price cut as well. Based on the difference of the loan amount dispersed, interest percentage can vary.
  13. There can be a 7-tier banking system. The principal system can be investment banks like JP Morgan, multinational retail banks like Citibank, Indian retail banks as HDFC, NBFC turned full-bank as Bandhan Bank, Savings bank like Post Office and banks for only the BPL segment.
  14. State Governments can work with the central government to work with PPP terms with a private player.
  15. Sharia Laws can also try to consider a nominal percentage in their banking system by enacting a separate law.

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