Kerala CM Chandy backs Islamic Banking

THIRUVANANTHAPURAM: Chief Minister Oommen Chandy has extended wholehearted support to the concept of Islamic banking as conceived by the LDF Government.

”We will take forward the good things initiated by the LDF Government. Al Barakah Financial Services is seen as a good concept. The State Government will do all that is possible to use interestfree banking for the investment needs of the state,” the Chief Minister said, while delivering the inaugural address at the national seminar on ‘Interestfree Institutional Mechanism for Banking, Finance and Insurance’ here on Monday.

The Chief Minister went even a step further. ”The State Government will try to get the necessary Central clearance for the smooth functioning of such banks which work on the principles of shariat.”The Chief Minister said that the State Government did not view Islamic banking with doubt. ‘

Kerala CM Chandy backs Islamic Banking‘Certain people have objections to the name Islamic banking. It is not the name that matters. What matters is whether such a system would bring good to society. This banking system, which operates differently from the traditional banking ways, is now popular in many parts of the world,” Oommen Chandy said.

The Chief Minister said that huge NRI funds could be tapped through the system. He said that the State had not been able to attract enough investment for major ventures. ”For this to happen, banks like Al Barakah should be made functional,” Oommen Chandy said.Industry Minister P K Kunhalikutty, who delivered the presidential address, said that the interest burden was the major problem faced by large projects in the state.’

‘Such projects will get generous dose of investment if interestfree banking comes into force,” Kunhalikutty said and added: ”Kerala which has evolved new models in various areas could be a pioneer in Islamic banking too.

”The Industry Minster said that he viewed Islamic banking in a positive manner. ”Interestrelated banking is not sensitive to the performance of a particular venture or project. But interestfree banking, because it involves participatory finance, will share both the losses and gains,” the Minister said.

He said that Islamic banking had proved highly successful in places such as England where the Muslim population was much less than in India.

Former Finance Minister Thomas Isaac, Additional Chief Secretary T Balakrishnan and Al Barakah Financial Services chairman P Mohammed Ali also spoke on the occasion.

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