Malappuram: The Islamic Bank
functioning on interest-free principles will change the very
outlook of the development projects in the state, Kerala Finance
Minister Dr Thomas Isaac said while inaugurating the seminar on
‘contemporary scopes of interest-free banking’ organized by the
Kerala State Industries Development Corporation in Malappuram.
The Minister said that the idea of the Al Baraka Financial
Services Limited emerged out of the thought of the ways to gather
interest-free money for investing in development projects.
hoped that Rs 40000 crores necessary for development
projects mentioned in the state budget could be gathered through
the interest-free investment. The plan behind the new venture is
to utilize the interest-free idea put forward by Islam for the
development of the state. The amount collected from the investors
will be used for the development of roads and infrastructure of
the state, and won’t be used for things prohibited by the Islamic
The profit will be distributed among the investors. The
very term Islamic bank had invited criticisms that it was against
secularism and was associated with terrorism. But the government
moved forward paying no heed to them, he added.
Industries Minister Elamaram Kareem, who presided over the
function, said that the government had decided to give only 11%
shares initially, even though many companies had expressed
interest to buy up to 79% shares.
He expected that the
Al Baraka could play an important part in several investment
projects worth Rs 1 lakh crore in the state. Only Islamic
financial institutions stood the economic crisis. There is an
Islamic bank with seven branches in Britain where there are only
5% Muslims. He shared his hope that the legal impediments to begin
an Islamic bank in India would soon move away.
Crores of rupees lay unused in the hands of individuals and in
institutions in the Gulf while the lack of investment barred
development projects in the state, said T Balakrishnan, Principal
Secretary of the state Industries Department. He added that the Al
Baraka would attract more foreign investment in Kerala.
Editor of ‘Madhyamam’ daily O Abdurahman, Raudathul Uloom Arabic
College Principal Dr Hussain Madavoor and MES Medical College
Director Dr Fasal Gafoor also spoke. KT Jaleel, MLA, welcomed and
KSIDC general manager Thomas Kutty delivered the vote of thanks.
The Al Baraka was registered as a non-banking financial
institution in 2009 under the initiative of the KSIDC. Dr Subrahmaniam Swamy
president of Janata Party, however, filed a petition in the Kerala High
Court against the company accusing that the government was
favouring a particular community. The High Court ruled against Dr
Swamy’s petition allowing the KSIDC to move forward with the
project last month.