HC stays Kerala's proposal for Islamic financial institution
Press Trust of India / Kochi Jan 05, 2010, 13:14 IST
The Kerala High Court today stayed the state government's proposal to start an Islamic financial institution on the lines of Islamic Bank.
"The government shall not commence operation of the proposed institution," a division bench comprising Chief Justice S R Bannurmath and Justice Thottathil B Radhakrishnan said while hearing a petition filed by Janata Party leader Dr Subramanian Swamy.
According to the petitioner, the government in its October 14 order, had accorded sanction for registration of Islamic Finance serving company by Kerala State Industrial Development Corporation (KSIDC) to provide financial services in accordance with Shariah law.
Under the proposal, KSIDC would contribute about 11 per cent equity and the corporation was taking steps to promoting Islamic financial institution. The proposed institution will not collect or charge interest for financing, the petitioner said.
According to Swamy, the CEO of the proposed company has to report to the Shariah advisory board.
Taking cognizance of banking laws set by law makers and available in current legislation it can be construed that setting of religious funds or financial institutions based on religious practices is prohibited..
In the interest of integrity the laws more or less prevail across the section and so why are the govt flaunting laws?? isn't it divisive?? accountability?? will this not create gray market? is this secular??
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