Saudi based Islamic bank enters India, first branch in Gujarat

[email protected] (CD Network)
June 1, 2016

Ahmedabad, Jun 1: The Saudi Arabia-based Islamic Development Bank (IDB) is set to start its India operations from Gujarat. The international financial institution which has its headquarters in Jeddah has chosen the home state of Prime Minister Narendra Modi to set up its first branch in India. The state will also get 30 medical vans as part of IDB's social sector initiatives.

jeddah

Islamic Development Bank headquarters located in Saudi Arabia's Jeddah.

IDB's main objective is to foster the economic development and social progress of member countries as well as the Muslim community in accordance with principles of Shariah (Islamic law). The bank has 56 Islamic countries as its members.

The developments follow an agreement between India's state-owned Exim Bank and the Islamic Corporation for the Development of the Private Sector (ICD), a private-sector arm of the IDB group, as part of deals signed during Modi's trip to Saudi Arabia in April.

The IDB, a multilateral lender with an authorised capital of $100 billion, counts 56 Muslim nations as its members. Most of these countries belong to the Organisation of Islamic Cooperation.

ISLAMIC BANKING: SOME FACTS 

  • It is a finance system based on the principle of not charging interest, which is prohibited under Islam. Now, it goes by a more formal moniker – participatory banking.
  • Instead of charging interest, the lender shares a part of the profit – or loss – with the borrower
  • It is open to non-Muslims as well
  • By 2020, the global Islamic banking industry profit pool is expected to reach $30.3 billion.

Its India operations will be led by Zafar Sareshwala, a prominent Muslim businessman from Gujarat whom the Modi government appointed chancellor of the Maulana Azad National Urdu University soon after assuming office.

The agreement in Jeddah was signed by Exim Bank regional head Tarun Sharma and ICD CEO Khaled Al Aboodi in the presence of Ahmad Javed, India's ambassador to Saudi Arabia.

To be based in Ahmedabad, the bank will offer interest-free capital to business startups, including small and medium enterprises within India, marking the entry of the Islamic banking – also known as participatory banking – into the country.

According to an Exim Bank statement, the IDB's bigger role will be in the $100 million (about Rs 670 crore) credit line it has pledged “with the aim of facilitating the export of goods and services from India to ICD's member countries”.

“The ICD will be open for business to all Indians, regardless of religious background. In Malaysia, the KFC chain runs on ICD finance although it is owned by a Chinese firm. Some people have this unnecessary issue with Islamic banking, which is actually known as participatory banking across the globe now,” said Sareshwala, who has been named as a director for the bank's India operations.

The IDB has also promised $55m (about Rs 380 crore) for a state-of-the-art rural mobile medical network – the first leg of which will be launched in Gujarat.

The IDB, which complies with global Islamic finance norms, does not charge interest on loans because the religion prohibits it. Instead, it charges a part of the profit and also shares any losses with the borrower.

According to the EY's World Islamic Banking Competitiveness Report 2016, Global Islamic banking assets would have reached US$1 trillion by 2015-end.

Comments

Ahmed
 - 
Thursday, 2 Jun 2016

Poorna Prakash, Mangalore
We have since long following banks
Catholic Syrian Bank
Nakodar Hindu Bank
The Hindu Co-Operative Bank Ltd.

But, you have a problem as soon as we get a Islamic bank.
This is nothing else but, intolerance.

Don't forget another bank: The Hindu Vote Bank.

Rikaz
 - 
Wednesday, 1 Jun 2016

Why feku's state is getting all of those facilities? why don't they bring it to Karnataka....

suresh
 - 
Wednesday, 1 Jun 2016

All the investment only to gujarat? Why? This investment will be mis used by Gujju's as it says if the business in loss it will be shared by both. gujju's are well known how to make them fool. This will create more mallya;s in Gujarat.

moshu
 - 
Wednesday, 1 Jun 2016

Hope one day rss will understand islam well and will follow the rule of Allah

moshu
 - 
Wednesday, 1 Jun 2016

Siddarth mumbai openly backing his hawala racket crooks operating by his modi govt

Naren kotian
 - 
Wednesday, 1 Jun 2016

It is done to curb India's black money outflow and inflow by hawala means ..since 90% of hawala transactions are mostly encouraged by just particular section ...anyways since they have given 100 million credit line ..so we have ample opportunity to export pig related products to 56 Islamic countries ..hahaha ...nia monitoring is must as terrorists are most likely to use this bank ...

muhammed rafique
 - 
Wednesday, 1 Jun 2016

Appreciate Modi's wisdom in realising the importance of Islamic banking

Rizwan
 - 
Wednesday, 1 Jun 2016

Good initiative by P.M , i appreciate his move. Both india and KSA will be benifited by this.

Asif
 - 
Wednesday, 1 Jun 2016

Al Hamdlillah... itrs great news... waiting from a long time... hope it soon opens its branches all over India.

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News Network
January 2,2020

Bengaluru, Jan 2: Accusing Prime Minister Narendra Modi of "neglecting" Karnataka ahead of his visit on Thursday, the state Congress questioned why he did not give adequate relief and pay a visit to the state, when most of its parts were affected by severe floods last year.

Modi will begin his two-day visit to the state on Thursday afternoon.

The Congress' Karnataka unit in a series of tweets also questioned the Prime Minister about not conferring the "Bharat Ratna" on Shivakumara Swamiji of Siddaganga Math, who passed away last year at the age of 111 years.

"Why you did not visit the state, when it was affected by floods? Despite the damage of over Rs 1 lakh crore why you did not declare it as a national disaster? Why you did not give interim relief? When the state government has given a report that the damage caused was to the tune of Rs 35,300 crore why did you sit quiet by giving just Rs 1,200 crore," the state Congress tweeted.

As many as 103 taluks in 22 districts of Karnataka were affected due to unprecedented floods in August, in which over 80 people were killed.

Around seven lakh people were shifted to safe areas during the deluge and thousands of houses were damaged.

In October, various parts of the state faced a deluge for the second time in two months, killing over 13 people and damaging thousands of houses.

Asking as to why the Centre was not giving the state's share of GST amount adequately, the Congress questioned as to why dues under MNREGA programme were not paid so far, and why Karnataka was being neglected while allocating grants.

Questioning Modi as to why he did not visit Tumakuru when Shivakumara Swamiji of Siddaganga Math passed away, the principal opposition party in the state Assembly, also sought to know why the seer was not conferred with the Bharat Ratna yet.

It also pointed out that former Chief Minister Siddaramaiah had written a letter in this regard in January 2018.

The Congress has also hit out at the BJP-led Central government over imposition of Hindi language by neglecting regional languages and mother tongue.

The Prime Minister will kickstart his visit to the state by paying tributes to the late pontiff's 'Gadduge' (final resting place) at the Math premises near Tumakuru.

Later, he will attend an event organised to give away Krishi Karman awards and to distribute fishing equipment at the government college ground in Tumakuru, before leaving for Bengaluru where he will be attending a DRDO event.

On Friday he will be inaugurating 107th Indian Science Congress here.

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News Network
March 1,2020

Mangaluru, Mar 1: Noted Konkani writer and theater personality Richard John Pais died on Sunday after a brief illness, family sources said.

He was 51. He is survived by wife and two children.

Known in literary circles as ‘RJP’, his short stories, satirical writings, and poems were very popular.

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News Network
July 2,2020

Mangaluru, Jul 2: Mangaluru BJP Corporator Manohar Shetty, who entered a manhole to clean a drain, said that he did it to avoid waterlogging ahead of monsoon as people were facing several problems for the past few years.

"In my ward, there is a rainwater drain at Kadri Kambla junction and for the past few years, there was a waterlogging problem due to trash water used to collect and vehicles used to find it difficult to pass in that area," Shetty said.

"Since there was a lot of trash it had to be cleared to avoid waterlogging. We changed our dresses, and then I along with my three party workers entered manhole and cleared the trash," he said.

The Mangaluru BJP Corporator further said that it was not a publicity stunt, and he cleaned the drain to solve the problem of people. "During elections, I had promised people to get the drain cleaned. Since monsoon was coming; something had to be done; we did not do it for publicity but to solve a problem," he said.

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