Why did Rajan approve SBI’s Shariah based Mutual fund?

Was Shariah banking attempted in India to create another route for Money laundering?

Was Shariah banking attempted in India to create another route for Money laundering?
Was Shariah banking attempted in India to create another route for Money laundering?

Just around the time Raghuram Rajan became the Governor of Reserve Bank of India, a proposal for setting up of a Shariah based Islamic Bank (Cheraman Financial Services) was allowed. Soon after, he also approved State Bank of India’s Shariah based equity fund. This is not the first time that a Shariah based bank was attempted to be opened in India. The Government of Kerala had tried this once and Swamy had to challenge it in the Kerala High Court via a writ petition and got it stopped. Swamy expressed apprehensions that money could get laundered through this route and wrote a letter to the Prime Minister, which is reproduced below:
Page 1 of Swamy letter to the PM
Page 2 of Swamy letter to the PM

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