Islamic Banking Gets Green Signal Form Reserve Bank of India in Kerala

Published on: 21 Aug, 2013
Published under: Cochin District News, Ernakulam District News, General Kerala News

19 August 2013
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.

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.

Source– http://english.manoramaonline.com/cgi-bin/MMOnline.dll/portal/ep/contentView.do?contentId=14795717&channelId=-1073865028&catId=-206121

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