<h1>RBI Declines Interest-Free Islamic Banking Proposal Citing Legal Constraints, Disclosed by Finance Minister in Rajya Sabha Response.</h1> The Reserve Bank of India (RBI) has been approached by the India Centre for Islamic Finance to consider introducing interest-free banking to promote inclusive growth, as recommended by the Raghuram Rajan Committee. However, the RBI has stated that under the current legal and regulatory framework, it is not feasible for banks in India to engage in Islamic banking activities domestically or for Indian bank branches abroad to conduct such activities outside India. This was disclosed by the Minister of State for Finance in a written response to the Rajya Sabha.