India's first Islamic bank to start in Kerala by 2010
George Joseph / Kochi Sep 01, 2009, 00:56 IST
The first Islamic bank in the country with active involvement of the Kerala government is likely to start operations in Kochi by next year as the bank’s registration formalities are currently being fulfilled on a war footing. The Kerala industries department is actively involved in the new initiative and a high level meeting held at Kozhikode on August 12 had approved a project report prepared by Ernst & Young.
Kerala State Industrial Development Corporation (KSIDC), which is the designated agency for the formation of the bank, will have 11 per cent stake in the proposed banking company.
According to government officials in the know, 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.
The project proposes to raise an initial capital of Rs 500 crore from leading non-resident Indians (NRIs) and Indian business houses. According to sources close to the development, 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.
Though an RBI study group had eariler rejected the concept of Islamic banking, it got the backing of the Raghuram Rajan Committee on banking reforms. Purely based on Shari’ah principles, the bank will avoid interest-based business activities. The proposed Kerala-based bank plans to invest funds in infrastructure projects, and two areas, Bai al Salam and Instinsa, under Shari’ah have been identified for such investments. The bank will invest all its funds in wealth generating investment avenues and will distribute 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 ventures.
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.
A major chunk of such persons do not have a bank account. A lot of discussion is also going on whether investment in capital market is against Shari’ah principles. A section of the community believes that share trading is against the fundamentals of Islam. So the formation of an Islamic bank will be a relief to them.
This concept is very popular in West Asia and in predominantly Muslim nations such as Malaysia and Indonesia. Leading international banks such as HSBC and Standard & Charted have exclusive Islamic banking windows.
According to sources, the biggest challenge before the Kerala-based bank will be the formation of a Shai’ah Supervisory Board in order to monitor the activities of the bank. The board should include independent scholars on Shari’ah and banking business.
IN THE NAME OF ALLAH.I welcome islamic shariyath bank to kerala/india.in nation the all bank are levey high interest rate from peopls and that will lead somany peoples to commit suicide,i pray to ALLAH TO GET APPROVAL FOR ISLAMIC BANK.IF ISLAMIC BANK COMES ACROSS THE WORLD IT WILL BE THE GREAT REVELUTION IN THE WORLD.
I syed from hyderabad and Iam a engineering student BY the grace of ALLAH taalah its really a good Sucesss in our country I pray ALLAH for the grand sucess of this "ISLAMIC BANK OF INDIA" not only in a particular but also in whole Nation..... Actually its my dream and i always think that If Allah subhanawataalah give me an opprtunity then I will open an ISLAMIC BANK IN INDIA with nearly 1000 branches and in every state min 50 branches should be ... I am very happy when i search in internet i know this information by net .......ok INSHALLAH I hope this "ISLAMIC BANK OF INDIA " become a every INDIAN bank and every one has an account in this bank JAZAKALLAHKHAIR........
Its a good initiative and thanks to govt and state oficials for giving it a nod and lend a helping hand.
What is the opprotunity for Mass Communication(Media) student to get a job in Islamic Bank.
Thank You
The proposals of the Islamic Bank in kerala,it will be a greate idea. I hope that, many true muslim brothers can relieve from the pain of the Ribah. My best wishes to all the co-ordiners of behind these project. May almighty Allah bless you all.
Content Guide
