MOST OF US THINK THAT MONEY IS THE IMPORTANT FACTOR IN THE ECONOMY.BUT WHEN YOU CLOSELY WATCH THE ECONOMY,WE WILL UNDERSTAND THAT INTEREST IS THE ONLY ELEMENT WHICH DRIVES IN THE ECONOMY.FOR EXAMPLE YOU ARE BORROWING Rs.1 FROM A BANK AT A INTEREST OF 10% WHILE PAYING IT BACK YOU HAVE TO PAY IT AS Rs 1.10 ,FROM WHERE DOES THE Rs .10 PAISE WILL COME.IT WILL COME OUT FROM THE BANK ONLY THROUGH GOVERNMENT.SO THIS LEAD TO THE RAISE IN MONEY CIRCULATION AND THE WANT TO CREATE MORE MONEY IN THE MARKET.BANKS PLAY A MAJOR ROLE IN INCREASING THE MONEY CIRCULATION IN THE COUNTRY.EVEN THE BANK PAY INTEREST TO ITS DEPOSITORS.SO ITS INCREASING THE MONEY CIRCULATION IN A VERY HIGH FACE.THIS LEAD TO RAISE IN INFLATION,MONEY CIRCULATION,DEPRECIATION IN MONEY VALUE ETC...IN ISLAMIC BANKING THERE IS NO PAYMENT OF INTEREST.SO IF IT IS ESTABLISHED IN INDIA THERE WONT BE REVENUE FROM IT.MORE OVER IT WONT HELP IN THE GROWTH OF GDP.SO WHAT THE GOVERNMENT IS NOT ENCOURAGING IT.
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