By TwoCircles.net Staff Correspondent,
Kochi: The Kerala High Court on Tuesday postponed the hearing of a petition on the proposed setting up of a financial institution based on Islamic banking for January 5. The petition was filed by former union minister and Janata Party president Dr Subrahmanian Swamy questioning the government sanction to the Kerala State Industrial Development Corporation for the formation of the institution.
Dr Swamy reportedly stated in the High Court yesterday that the setting up of a financial institution on the basis of the Sharia laws was against the secular outlook of the country. The applicants for the post of CEO of the institution were asked to report before the Sharia Advisory Board. The government is trying to use public money for matters concerning a particular community, the petitioner said. When the court asked for evidence to prove that the KSIDC was part of the government, the petitioner asked time to produce documents. The court then decided to consider the case again on January 5.
Dr Swamy has come up with the petition at a time when the Kerala government has decided to promote interest-free banking in the model of the Islamic banking system. The government has decided to set up a non-banking financial institution in the model of an Islamic bank with a view to attract the investments of the NRIs for the development of the state. It was noted that several NRIs refused to invest their money in banks as banks were all interest-based in the country. The proposed financial institution would have a Sharia Advisory Board and would function as per the Sharia laws. A draft plan of the institution was presented by T Balakrishnan, principal secretary to the state Industries Department who is in charge of the institution, at a two-day seminar on Islamic banking held in Calicut in October.
Renowned NRI businessman Gulfar Muhammedali has been named the Chairman of the institution and a committee of 12 promoters has also been formed. The institution might require Rs 1000 crore as capital and is supposed to begin functioning by the middle of next year.