Community News

Kerala High Court clears way for India’s first Islamic bank

Trivandrum: India is all set to have its first Islamic bank. The Kerala High Court on 3 February dismissed petitions challenging the Kerala government’s decision to establish India’s first Islamic Bank which will work on the principles of Shariah. The order came from a Division Bench comprising Chief Justice J Chalameswar and Justice P R Ramachandra Menon,  which rejected petitions filed by Janata Party President Subramaniam Swamy and another. The petitioners contended that the state establishing a bank which will work on the principles of a religion will violate the principle of secularism enshrined in the Constitution. However, the court did not agree. The state had first floated the idea of establishing the bank under an entity registered as Al-Baraka  Financial Services way back in December 2009. The bank was also to have a body of Islamic scholars to advise  whether the principles of shariah were being complied with. But in January 2010, the HC stayed the government’s plans and issued notices to the RBI, Finance Ministry and Kerala State Industries Development Corporation (KSIDC) which was to hold 11 percent equity in Al-Baraka. The RBI had replied that the current laws did not permit such a bank.

This article appeared in The Milli Gazette print issue of 16-28 February 2011 on page no. 21

We hope you liked this report/article. The Milli Gazette is a free and independent readers-supported media organisation. To support it, please contribute generously. Click here or email us at sales@milligazette.com

blog comments powered by Disqus