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Saturday, 7 September 2013

India debuts Syariah-based investment firm Cheraman seeks 20b rupees in 2 years to fund infrastructure

KUALA LUMPUR] India has started its first Syariah- compliant investment company, seeking to tap Islamic wealth to fund a US$1 trillion infrastructure spending plan even as the rupee plunges.
Cheraman Financial Services Ltd, which began operations in July, is seeking to raise more than 20 billion rupees (S$377 million) over two years, managing director Mohammed Hanish said in a Sept 2 interview. The firm, based in Kochi in south-western Kerala state, is seeking capital from India, the Middle East and South-east Asia that could be used to finance the government's five-year development programme, he said.
The initiative will be a game changer for new institutions and foreign investment at a time when the economy faces challenges, including a record current account deficit, according to Ernst & Young LLP. India has resisted introducing Islamic banking laws since at least 2008 amid opposition from the country's majority Hindu population.
"Islamic finance can be a quick-win solution to address part of the challenges India faces today," Ashar Nazim, Bahrain-based partner at Ernst & Young, said in a Sept 3 interview. "The risk, on the other hand, of a failed experiment is it will hurt the credibility of the industry big time in India and push it back another 5-10 years."

(Bt Premium / 06 Sept 2013)

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1 comment:

  1. This is good to know at a time when India needs a huge investment in its infrastructure. Indian government should make a decision based on economic viability rather than on the wishes of a section of society. Indian investment companies managing the infrastructure projects should tap the resources from cash-rich oil producing nations using public-private partnership models and by issuing Sukuk for such projects. Indian is already behind in tapping the untapped financial resources to fund projects.

    The new RBI Governor is an economist of par excellence and he would certainly make ways for the introduction of Islamic finance in India.


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