Kerala court stays government-aided Islamic banking

April 8th, 2010 - 6:55 pm ICT by IANS  

Kochi, April 8 (IANS) The Kerala High Court Thursday in an interim order restrained the government or state-run organisations from starting Islamic banks, but allowed a private company to start its operations.
The bench headed by Chief Justice J. Chalameshwar allowed Al-Baraka Company to go ahead with its operations.

Former union minister Subramaniam Swamy and one more person had petitioned the court against state-owned Kerala State Industrial Development Corporation starting an Islamic bank with private collaboration.

The court asked the state government to freeze all such activities till a final verdict on the issue.

Chief Minister V.S. Achuthanandan said the state government will look into all aspects of the court’s interim verdict and then decide what needs to be done.

“We have to see if such a thing happens, will it be good for the people or would it be detrimental. So at the moment I do not wish to make any comments. We will study all aspects and then decide,” said Achuthanandan.

Director of Al-Baraka, prominent businessman E.M. Najeeb said, “In the wake of this verdict, the board of the company will soon meet and decide the future course of action.”

Al-Baraka has 14 promoters who have contributed Rs.4.2 crore and a

17-member board with prominent Middle East businessman P. Mohammed Ali as its chairman and another businessman, C.K. Menon, as the vice-chairman.

With the latest verdict, three government officials who are on the board of the company will have to step down.

According to the company, the proposed bank will give no interest and a sharia board will decide on what sort of investment to make.

Muslims are the second largest community in the state with close to 24 percent of the 3.2-crore population.

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