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 7,2020

Mangaluru, Jan 7: Kasturba Medical College Mangaluru, a constituent unit of Manipal Academy of Higher Education (MAHE), in association with Pai Family Endowment (in memory of Shri Suhas Gopal Pai) as its social initiative opens a newborn hearing assessment centre at Govt Lady Goshen Hospital on Tuesday.

Dr M Venkatraya Prabhu, Dean of KMC Mangaluru addressing the media persons said that the project is made possible by the generous philanthropic contribution of Mrs Anuradha (Shanthi)Gopal Pai and will be inaugurated by her in Presence of Dr H Vinod Bhat, Vice-Chancellor of MAHE.

Dr Deepak Madi, Deputy Medical Superintendent KMC Hospital Attavar explained that the facility will be managed by the departments from Audiology, ENT and Paediatrics of Kasturba Medical College, Mangaluru. The Centre aims to screen all the babies born in the hospital for hearing loss.

This is the maiden initiative of the MAHE-Pai Family endowment which has been set up to find solutions for the numerous challenges faced by the hearing handicapped in & around Dakshina Kannada district.

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News Network
February 27,2020

Mangaluru, Feb 27: An utterly unprofessional thief, who fell asleep after breaking into a house, was caught by the house owner and handed over to the police in the coastal district of Dakshina Kannada.

The hilarious incident took place on Wednesday in the one-storey, tiled-roof house owned by Sudarshan at Ullas Junction under the limits of Uppinangady police station.

The thief, who gained entry into the house by removing the roof-tiles, has been identified as Anil Sahani, a native of Bihar’s Majipur district. He was snoring on the sofa with a set of keys clutched in his hand when the house owner woke up in the morning.

The house owner, who was sure that the thief was drunk, woke him up by hitting him with a stick and then handed him over to the police.

According to police, the thief was tired after removing the tiles on Tuesday night and hence he decided to take a nap soon after entering the house.

He grabbed a bunch of keys kept near the TV stand and then lied down on the sofa. He woke up only when the house owner hit him with a stick the next morning.

Comments

Naina Kudla
 - 
Thursday, 27 Feb 2020

Inspired by the Rabbit which was defeated by the Tortoise

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News Network
May 17,2020

Bengaluru, May 17: Karnataka Deputy Chief Minister and Transport Minister Laxman Savadi on Sunday wrote to Union Minister Nitin Gadkari requesting to issue new lockdown guidelines including permission to operate public transport and said the lockdown has caused a financial loss of Rs 16,00 crore to all four Karnataka Transport Undertakings.

In view of these problems, the state Transport Minister requested Gadkari to permit the deployment of Non-AC buses on scheduled routes to ensure the adequacy of services.

The four State Transport Undertakings (STUs) in Karnataka which are providing bus-based public transport services within the state and to the neighbouring states are Karnataka State Road Transport Corporation (KSRTC), North West Karnataka Road Transport Corporation (NWKRTC), North Eastern Karnataka Road Transport Corporation (NEKRTC) and Bangalore Metropolitan Transport Corporation (BMTC).

"KSRTC, NWKRTC and NEKRTC operate buses for mofussil services i.e. Interdistrict, intradistrict and interstate, whereas BMTC operates only in urban and suburban areas in the city of Bengaluru. The four STUs put together hold a fleet of about 24,900 buses including 1,520 air-conditioned buses and operate about 71.00 lakh km. per day and carries about 98.00 lakh passengers every single day," Savadi outlined in the letter.

The Minister said due to the COVID-19 outbreak and the lockdown that ensued have brought regular bus operations and functioning to a grinding halt.

"This has caused a devastating impact on the operations of all the four STUs due to the combination of lack of revenue and continuing fixed costs such as salaries and pensions to staff, payables against existing loans etc. It has been estimated that the lockdown has caused a financial loss of INR 1,600/- crore to these four STUs," he added.

Savadi said even after post-COVID lockdown, operations and revenues won't reach its previous demand& supply patterns in the next six to eight months due to reduced economic activity and users' perceived risk of contacting COVID in public transport.

In addition to that, "occupancy should be allowed up to seating capacity (without standees). This is essential to meet minimal demand," he said in the letter.

"The crew should wear facemask and hand gloves. The crew with health issues should not be deployed. The face masks should be made mandatory for all the passengers. Only asymptomatic persons should be allowed to travel in public transport. The Government of India may consider staggering working hours for various sectors to reduce peak hour traffic demand," the minister listed out these recommendations in the letter.

Savadi said that with social distancing norm of reduced seating capacity in public transport, it will not be possible to provide transport facility to all the daily passengers. This will create demand for more buses, which cannot be met.

"Restrictions on public transport will lead to passenger commute by overcrowding in smaller vehicles like cars, maxi cabs, goods tempos etc. which will adversely affect preventive measures," he added.

Therefore, Savadi requested Union Minister to look into the above matter and issue fresh guidelines to all the states / UT's.

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