First Islamic Bank of India in Kerela : Start its Operations by 2010
- India’s First Islamic Bank in Kerela.
India’s first Islamic bank will get to start its operations by next year in Kochi because of vigorous involvement of the Kerala government.
The Kerala industries department is keenly involved in the new project and a high level meeting held at Kozhikode on August 12 had approved a project report prepared by Ernst & Young.
As per government officials, it will be registered as a non-banking finance company (NBFC) in the beginning and later get transformed into a full-fledged Shari’ah-compliant bank. It is likely that the registration formalities will be completed in the current year itself and the NBFC will become operational in 2010.
For the project, an initial capital of Rs 500 crore (Rs 5 billion) would be raised from leading non-resident Indians and Indian business houses.
As per the information, leading NRI businessmen such as Mohammed Ali, MA Yusuf Ali, CK Menon and other Kerala-based industrialists such as Azad Mooppan have shown keen interest in the venture.
The concept is getting widespread support among the Muslim community of the state as a large number of rich Muslims are strictly practicing Shari’ah principles in business.
According to critics, the bottleneck in front of Kerela- based banks will be the formation of a Shai’ah Supervisory Board for monitoring the activities of the bank.
The board should include independent scholars on Shari’ah and banking business.
The bank will invest all its funds in wealth spawning investment avenues and will dispense profit to its shareholders.
The proposed Islamic bank will also set apart a social fund, compulsory under Shri’ah principles and the Islamic banking concept, and will provide interest-free loans to the Gulf returnees to set up business or small scale projects.
Islamic banking means to a system of banking or banking activity that is constant with the principles of Islamic law (Sharia) and its practical application through the development of Islamic economics.
