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Saturday, 17 August 2013

India: Islamic banking gets RBI approval

KOCHI: The Kerala government has got the go-ahead from the Reserve Bank of India ( RBI) to launch a financial institution following the principles of Islamic finance.
Cheraman Financial Services Limited (CFSL) will be floated by Kerala State Industrial Development Corporation to function as a non-banking finance company (NBFC).
A formal announcement on CFSL, the latest incarnation of Al Baraka Financial Services, is expected on Saturday. Counting on the state's traditional Gulf links, the previous government had hoped to raise Rs 40,000 crore.

CFSL will have a paid-up capital of about Rs 100 crore but intends to raise about Rs 250 crore as alternative investment fund.

The Shariah-compliant institution will desist from charging interest on loans or give interests on deposits.

It will target sectors like infrastructure, services and manufacturing sectors and keep off taboo areas including liquor, tobacco and gambling or speculation.

Financing start-up projects is one of its pilot programmes. There are also plans to set up a commercial complex in Kannur and operate seaplane services.

"We've received many concept papers. We will select a feasible few to start with," sources said.

(The Times Of India / 17 Aug 2013)

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