ABSTRACT Islamic finance is one of the most rapidly growing segments of the global financial system however in many countries it is still at its embryonic stage. There are only three million Muslims in UK and it is the hub of Islamic finance as compared to India which has a Muslim population of 160 million. This paper provides with an introduction on Islamic finance/banking and how it can be accommodated with the conventional system and how they can be run parallel to each other. It also gives examples of companies like Taurus Mutual Fund which launched the first actively Managed Equity Oriented Sharia compliant diversified fund. Islamic Finance will be a challenge for all Banks to understand and accommodate the needs of such clients, regulators to formulate policies and procedures for Islamic finance and academicians to produce trained work force in this area. India being a developing country has a lot of scope for growth and Islamic finance can be one of the ways for India to gain a brighter future
