Kerala government gets Reserve Bank of India nod for Islamic banking

[GreenFoe]

KOCHI: The Kerala government has got a go-ahead from the Reserve Bank of India 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, was made on Saturday.

Industries minister PK Kunhalikutty and CFSL chairman P Mohamad Ali told reporters here that the firm would function as a non-banking finance company with an authorised capital of Rs 1,000 crore.

CFSL has already received clearances from the RBI, the Securities and Exchanges Board of India ( SEBI) and the wakf board, the chairman said.

The Kerala State Industrial Development Corporation ( KSIDC) will be the single largest shareholder in the company, holding 11% shares. The other individual shareholders can hold a maximum of 9% shares.

Counting on the state's traditional Gulf links, the previous government had hoped to raise Rs 40,000 crore. The Sharia-compliant CFSL will launch road shows in various cities of India and the Gulf countries from next month

The body 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.

The firm will float an alternative investment fund under the banner of Cheraman Fund, with a corpus of Rs 250 crore. The fund will focus on manufacturing and service sectors, mainly in Kerala.

Initially, the fund will raise about Rs 50 crore and one of the early projects to be taken up will be to provide support to startup schemes, managing director APM Mohammed Hanish said.
Kerala government gets Reserve Bank of India nod for Islamic banking - The Economic Times

 

[Mritunjaya]

"The body will desist from charging interest on loans or give interests on deposits."

1. They are expecting investors to deposit money without the bank paying interests ?

2. Are Hindu's eligible for loans in this bank ? ....how soon can I apply for a interest free loan ?

 

[Skallagrim]

"The body will desist from charging interest on loans or give interests on deposits."

1. They are expecting investors to deposit money without the bank paying interests ?

2. Are Hindu's eligible for loans in this bank ? ....how soon can I apply for a interest free loan ?

Though I don't know the details of Islamic Banking...

1. Yes..It's mainly Muslims who deposit their money with Islamic banks. But here in BD I've seen many Hindus too who have accounts in Islami Bank (I honestly don't know why).

2. Yes..Your religion has nothing to do with your eligibility in receiving a loan from an Islamic bank.

 

[Vishwamithra]

is Islam a new business brand?

 

[Armstrong]

"The body will desist from charging interest on loans or give interests on deposits."

1. They are expecting investors to deposit money without the bank paying interests ?

2. Are Hindu's eligible for loans in this bank ? ....how soon can I apply for a interest free loan ?

I think @HRK would be the most qualified PDFer to answer those questions seeing that he works in the Islamic Banking Industry !

 

[Imran Khan]

is Islam a new business brand?

since 1400 years

 

[Mritunjaya]

Though I don't know the details of Islamic Banking...

1. Yes..It's mainly Muslims who deposit their money with Islamic banks. But here in BD I've seen many Hindus too who have accounts in Islami Bank (I honestly don't know why).

2. Yes..Your religion has nothing to do with your eligibility in receiving a loan from an Islamic bank.

In which case I would love to take a loan of 50 Crore from the bank and repay that 50 crores in 10 years.

 

[HRK]

Though I don't know the details of Islamic Banking...

1. Yes..It's mainly Muslims who deposit their money with Islamic banks. But here in BD I've seen many Hindus too who have accounts in Islami Bank (I honestly don't know why).

as per my experience non-muslims prefer to have term deposit in Islamic banking sys.....as Islamic Banks do not charge early encashment plenty incase they encash their deposit premature......it is prohibited in Islam.

 

[Skallagrim]

In which case I would love to take a loan of 50 Crore from the bank and repay that 50 crores in 10 years.

When you borrow from an Islami Bank the bank itself becomes your partner in business and you have to pay it part of your yearly profit. That is to say the bank just doesn't lend you money, it lends you to invest in business.

 

[HRK]

"The body will desist from charging interest on loans or give interests on deposits."

1. They are expecting investors to deposit money without the bank paying interests ?

Banks share their profit with depositors at predetermine ratio.

2. Are Hindu's eligible for loans in this bank ? ....how soon can I apply for a interest free loan ?

Yes....anyone having Halal business can apply for business loan

 

[Armstrong]

Yes....anyone having Halal business can apply for business loan

Sir yaniii agar mein neiii apniii eik Brewery kharadniii ho tou mujhee aaap Loan nahin deiiin geiii ?

 

[anonymus]

since 1400 years

since 1919 imran bhai.

Banks share their profit with depositors at predetermine ratio.

This is the concept of shares and equity.

 

[HRK]

Sir yaniii agar mein neiii apniii eik Brewery kharadniii ho tou mujhee aaap Loan nahin deiiin geiii ?

No you won't get loan as minors cannot enter into any contract..........

 

[HRK]

since 1919 imran bhai.

This is the concept of shares and equity.

No....it is a lengthy topic to discuss, but for ease you can understand Bank act as Fund Manager.........the profit (rate could not be fixed prior to the business) would be share according to predetermine ratio (as in partnership)

 

[joekrish]

Where is Kerala heading, not long before enforcing sharia there.