JEDDAH
-- The Jeddah-based Indian Forum for Interest-Free Banking has urged Prime
Minister Manmohan Singh to clear huddles for granting license for
Shariah-compliant banks and financial institutions to operate in India.
In
a petition submitted to the prime minister at the Emerging Kerala Global
Connect, a biennial summit of investors and policymakers, held in the southern
port city of Kochi last week, they said it would open floodgates
infrastructural funding for India.
Islamic
banking assets are estimated at more than $ 1.5 trillion worldwide and it is
operational in 52 countries, including the US, UK, Australia, France,
Singapore, Japan and China.
According
to the latest report of the State-Level Banking Committee, the overseas
remittances in Kerala banks alone jumped 30.7 percent in the first quarter of
the current fiscal year when total deposits were 556.6 billion rupees against
385.56 billion rupees during the same period in 2011.
According
to the officials of the group, many expatriates prefer not to claim interest on
their bank deposits for reasons of faith and these funds lie idle in banks due
to lack of attractive investment opportunities. In fact, it offers a major
option for infrastructure funding, a strong catalyst for accelerating India's
economic growth.
"The
major hurdle before such investments is the Reserve Bank of India's regulations
in which interest-free investment has no role. In order to boost the Kerala
economy, the government should explore possibilities of such participatory
finance ventures from overseas," said V.K. Abdul Aziz, the group's
secretary-general.
Aziz,
along with K.T. Muneer, a member of its executive committee and the general
secretary of Overseas Indian Congress Committee, Saudi Arabia, submitted copies
of the representation to Kerala Chief Minister Oommen Chandy and Cabinet
ministers P.K. Kunhalikutty and K.C. Joseph.
Aziz
said Indian Contract Act allows citizens to enter a contract in accordance with
interest-free economics and it is possible to cover all Shariah-compliant
contractual obligations under the act. The parties are at complete liberty to
structure it accordingly.
"If
Kerala decides to open its doors to an interest-free economy, it would go a
long way in creating a suitable environment for investment and facilitate
Shariah-compliant investment in various sectors including infrastructure that
has potential to change the state's economic scene," Muneer said.
The lobbyists for Islamic
banking operations in India are upbeat after former World Bank economist
Raghuram Rajan, a strong votary of Islamic finance who's known for his views in
favor of competitiveness instead of protectionism to tide over economic
slowdown, took over as India's chief economic adviser recently.
(Daily News / 27 Sep 2012)
---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
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