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‘Nobel nominated fact-checker’ Md Zubair spreads fake news that Raghuram Rajan didn’t propose Islamic banking in India, uses a different unrelated report

While the committee on Financial Sector Reforms headed by Raghuram Rajan had proposed Islamic Banking in India, Zubair used the report by the committee on financial inclusion headed by Dr. C Ranganathan to claim Rajan didn’t propose it

On 15th December 2022, ‘fact-checker’ and Alt News co-founder Mohammed Zubair tried to ‘fact-check’ journalist Rahul Shivshankar but ended up spreading fake news himself. While Times Now editor Rahul Shivshankar had quoted a report by former RBI governor Raghuram Rajan that talked about Islamic banking, Zubair claimed that the report was by Dr. C Rangarajan.

Rahul Shivshankar made the comments after Raghuram Rajan joined the Bharat Jodo Yatra of Congress leader Rahul Gandhi. Calling it ironic, he wrote, “In 2008, Rajan prepared a report on improving infrastructure for financial inclusion, recommending interest-free banking in compliance with Shariat.” Shivshankar then asked, “Is pushing interests of only one community an act of inclusivity?”

The journalist was referring to a proposal by Rajan to consider introducing Sharia-compliant Islamic Banking in India, known as interest-free banking. While Md Zubair didn’t deny that such a proposal was made, he claimed it was made by former RBI governor Dr. C Rangarajan.

Zubair’s tweet with false claim

“The 2008 report by Committee on Financial Inclusion was chaired by Dr. C Rangarajan, Not Raghuram Rajan,” claimed Zubair, quoting the tweet by Shivshankar. He even mocked Shivshankar suggesting that he was mixing between Raghuram Rajan and C Rangarajan, as he posted photographs of the two former RBI governors in a subsequent tweet.

But the ‘fact-checker’ was soon fact-checked, because it was indeed Raghuram Rajan who had authored a report that talked about Sharia-compliant banking, and there is no record of Dr. C Rangarajan making such a proposal. It was Zubair who was mixing up two reports by two committees, one headed by Rajan and the other by Ranganathan, and made a completely false claim. Because Islamic banking was indeed proposed in a report prepared by a committee headed by Raghuram Rajan. On the other hand, the report by the Ranganatha committee didn’t mention it.

In August 2007, the Planning Commission of India formed a high-level committee on Financial Sector Reforms headed by Raghuram Rajan, who was working as a professor at the Graduate School of Business in the University of Chicago at that time. The committee presented its report in the year 2008, titled A Hundred Small Steps. As popular Twitter user The Hawk Eye pointed out, Radhuram Rajan headed the committee.

On page 72 of this report, there is a section titled “Improving infrastructure for financial inclusion”, where the idea of interest-free banking was discussed. A para in that section reads, “Another area that falls broadly in the ambit of financial infrastructure for inclusion is the provision of interest-free banking. Certain faiths prohibit the use of financial instruments that pay interest. The nonavailability of interest-free banking products (where the return to the investor is tied to the bearing of risk, in accordance with the principles of that faith) results in some Indians, including those in the economically disadvantaged strata of society, not being able to access banking products and services due to reasons of faith. This nonavailability also denies India access to substantial sources of savings from other countries in the region.”

Proposal for interest-free banking in Raghuram Rajan committee report

While the report does not mention the words Islamic banking or Sharia compliance banking, the text makes it clear that it is referring to Islamic banking only. It says that certain faiths prohibit the use of financial instruments that pay interest, which directly points towards Islam as earning interest on money is considered haram only in Islam where.

The report had said that while interest-free banking is provided by some NBFCs in India, it should be made available on a larger scale, including through the banking system.

In his tweet, Zubair wrote, “The 2008 report by Committee on Financial Inclusion was chaired by Dr. C Rangarajan, Not Raghuram Rajan.” But the fact is that, Rahul Shivshankar didn’t even claim that the Islamic Banking was proposed in the report by Committee on Financial Inclusion. The Times Now editor wrote that Rajan had prepared a report on “improving infrastructure for financial inclusion”, where he had recommended interest-free banking.

The text “improving infrastructure for financial inclusion” is the exact title of the chapter where Islamic banking was proposed in the Raghuram Rajan report, which can be seen in the PDF of the report.

Zubair deliberately converted “improving infrastructure for financial inclusion” to “report by committee on financial inclusion” to make false claims. While both the phrase contain financial inclusion, they are talking about different aspects of the subject.

It is interesting to note that now ‘fact-checker’ Md Zubair is claiming that Raghuram Rajan didn’t propose Islamic banking, while the proposal of the committee was widely reported in the year 2008 itself. For example, a September 2008 report by Financial Express said in the headline: Raghuram Rajan report advocates introduction of Islamic banking.

2008 report on Islamic banking proposal by Raghuram Rajan committee

Moreover, when the Reserve Bank of India finally rejected the proposal of Islamic banking, most reports on it had mentioned that it was proposed in the Raghuram Rajan report. A News18 report in November 2017 said in its headline, ‘RBI Shuts Door on Raghuram Rajan’s Plan to Introduce Islamic Banking in India’.

Most other reports on the RBI decision had mentioned the same thing, with the Times of India saying, “It all started in late 2008, when a committee on Financial Sector Reforms, headed by former RBI governor Raghuram Rajan, had stressed on the need for a closer look at the issue of interest-free banking in the country.”

Therefore, there was never any dispute that a Planning Commission committee headed by Raghuram Rajan had proposed introducing Islamic Banking in India. But now, Mohammed Zubair, who was allegedly nominated for Nobel Peace Price for his extraordinary skills in fighting fake news, is now spreading the fake news that Rajan never made the proposal.

While trying to prove that the committee that made the proposal was headed by Dr. C Rangarajan and not Raghuram Rajan, Zubair posted the page of a report that contained the names and signatures of the authors of the report. He posted it in response to a Twitter user saying that it is possible that Rajan was a member of the committee headed by Rangarajan. In this page, there is no name or signature of Rajan while Ranganathan’s name and signature are there, thus it proves that he didn’t make the proposal, implied the ‘fact-checker’.

But it was actually another big fake news, as in order to deceive people, Md Zubair deliberately used a different report prepared by a different committee headed by Ranganathan. He was referring to the report of a committee on financial inclusion headed by Dr. Ranganathan, which was published in January 2008.

The Ranganathan Committee was appointed by the Financial Commission, and the report does not mention interest-free banking or Islamic banking. The page containing the names and signatures of members of the Financial Inclusion Committee is also found in this report, on page 31.

Therefore, the ‘fact-checker’ used the content of a totally different report, prepared by a different committee headed by a different person and formed by different organisations to claim that Raghuram Rajan didn’t propose Islamic banking in India.

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Raju Das
Raju Das
Corporate Dropout, Freelance Translator

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