Islamic Banking as a Tool for Financial Inclusion - A Study of Islamic Investment Products

India is one of the most rapidly developing countries in the world. This is unarguably the direct consequence of the economic reforms initiated primarily during the time of major macro-economic crisis witnessed by the country in 1991. On account of economic reforms the country has experienced a continuous rise in GDP growth rates barring certain exceptions. During this entire period the employment rate, per-capita income, wages and investment etc. have also shown improvement. However, this growth story has also led to a skewed distribution of the benefits thereby accentuating the perennial problem of poor-rich divide. The problem gets murkier with the inability of majority of people in the country to participate in the financial system in various ways. This problem is partly on account of non-availability of assets , savings, inappropriate design of products but also a great proportion of people stay away from the current system on account of the religious reservations. This paper tries to position Islamic investment products as a potential tool for supplementing & complimenting the current financial system in overcoming the problem of financial exclusion in India and other developing countries.