Tuesday, February 18, 2014

ARABNEWS: India takes key step toward full-fledged Islamic banks

THIRUVANANTHAPURAM: India is planning to set up a body to fine-tune and promote Islamic finance before issuing license to start full-fledged banking operations, according to one of the country's senior ministers.

“The formation of the entity is an important step forward. We need to set a framework for rules for different financial products to be offered by these banks or through the Islamic banking windows,” said Rahman Khan, India's minister for minority affairs, according to a report by ArabNews.com (18 Feb 2014).

He was talking to Arab News on the sidelines of the international seminar on Interfaith Harmony and Tolerance in Kuala Lumpur organized by the International Islamic University Malaysia (IIUM) in association with Kerala-based Ma'din Academy recently.

“We will introduce a financial product like Tabung Haji which would be a great relief to those who want to undertake the pilgrimage,” said the minister, who has aggressively been pursuing the idea ahead of the general elections two months away.

The report added:

Last year, India's central bank, Reserve Bank of India, decided to give license to non-banking financial companies to offer Shariah-compliant products and Cheraman Financial Services Limited (CFSL), launched by Kerala with the support of prominent expatriate entrepreneurs in the Gulf, was first to get the RBI license.

Khan wrote to the RBI Governor, Raghuram Rajan, saying it was the duty of the State to facilitate every citizen to practice and follow their religion under the Constitution and the governor, while accepting his view, wanted certain amendments to the laws concerned. Khan has urged the ruling party leadership to expedite the process before the elections.

“This is a great development everybody was looking forward. It'll help India attract a lot of foreign and domestic investments in infrastructure development and other core areas,” said Siddeek Ahmed, one of the directors of the CFSL.