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
December 16,2024

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In a significant milestone, the Dakshina Kannada Zilla Panchayat Higher Primary School in Newpadpu, Harekala, has introduced a bilingual Kannada-English medium this academic year, a move spearheaded by Padma Shri awardee Harekala Hajabba. The school has so far received 13 admissions for its Class 1 bilingual program.

This initiative is part of a broader effort by the state government, which approved 38 schools across the district to launch bilingual mediums. Expressing his delight, Hajabba shared that he had been advocating for a bilingual school for years. "The bilingual medium will greatly benefit students in this region who otherwise rely on private schools. However, we currently face a shortage of classrooms. Construction of two additional classrooms is underway, and once completed, we expect higher admissions," he said.

The school had previously been permitted to introduce LKG and UKG classes in the last academic year. According to the school’s headmistress, Rajeshwari, while the pre-primary sections have seen good enrolment, the bilingual Class 1 faced challenges, securing only 13 students. She attributed this to the late notification of permission, which arrived a month after the academic year began, leading many children to enroll elsewhere.

Rajeshwari remains optimistic about the future. "We expect better admissions next academic year as awareness about bilingual education at this government school grows," she said, adding that the classroom shortage will soon be addressed.

Deputy Director of Public Instruction (DDPI) Venkatesha Subraya Patagara noted that bilingual schools across Dakshina Kannada have generally received a positive response, with some schools enrolling more than 100 students. The effort to offer bilingual education in government schools marks a step forward in providing affordable, quality education to underserved regions.

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News Network
December 10,2024

SMKrishna.jpg

Bengaluru: Karnataka has declared a holiday for state government offices, schools and colleges on Wednesday, December 11, in the wake of a state funeral for former chief minister S M Krishna, who passed away in Bengaluru on Tuesday.

The last rites of Krishna, 92, will be held at his native village of Somanahalli in Mandya's Maddur taluk.

A government order stated that the holiday would apply to private aided educational institutions too.

Besides, the government has declared three days of mourning (December 10-12), during which no public entertainment programmes would take place, while the national flag would fly at half-mast.

S M Krishna passed away at his residence on December 10, 2024. The 92-year-old veteran politician was ailing for quite some time, a family source said.

A charismatic leader with a modern outlook, he not only laid a strong foundation for the growth of IT and BT industries in Karnataka but also managed to get them onboard with the government to build “Brand Bengaluru” at the international level.

He held several prominent positions throughout his career as External Affairs Minister, Maharashtra Governor, Chief Minister of Karnataka, Speaker of Karnataka Legislative Assembly and Minister in the Karnataka government.

Although known for his tech savviness, flamboyancy, style and the Western outlook, the Congressman-turned-BJP senior leader was a hardcore Bengalorean who loved the city’s trees and flowers. SMK also had a love for tennis. Even when he was Chief Minister, he would visit the tennis court to play the game two to three times a week. 

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News Network
December 12,2024

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Angry BJP lawmakers stormed Assembly Speaker U T Khader’s chambers at the Suvarna Vidhana Soudha, escalating tensions after the ruling Congress turned the tables on the saffron party over the Panchamasali Lingayat community’s reservation issue.

The friction began when Congress MLA Vijayanand Kashappanavar, a Panchamasali Lingayat, was allowed to criticise the Basavaraj Bommai-led BJP government’s controversial decision to scrap the 4 per cent Muslim quota, reallocating it equally to Lingayats and Vokkaligas. Kashappanavar slammed the BJP’s move, accusing it of being a mere election gimmick.

“The previous BJP government created two new reservation categories, 2C for Vokkaligas and 2D for Lingayats, just before the 2023 Assembly elections,” Kashappanavar said. “When challenged in the Supreme Court, the BJP government admitted it would not implement the decision. They announced it for votes but backtracked in court, misleading Panchamasali seer Basava Jaya Mrityunjaya Swami.”

Adding fuel to the fire, Kashappanavar alleged that RSS members had incited violence during a protest for enhanced Panchamasali Lingayat reservation. This claim enraged BJP lawmakers, who demanded the comment be expunged. However, Speaker Khader permitted Revenue Minister Krishna Byre Gowda to read aloud the BJP government’s affidavit to the Supreme Court.

“If the Panchamasali Lingayat community has faced injustice, it is because of the BJP,” Gowda declared, sparking further protests from the opposition. BJP leaders accused Khader of being “one-sided” and disregarding a point of order raised by BJP MLA V Sunil Kumar.

When Khader adjourned the session for lunch, the confrontation boiled over. Opposition Leader R Ashoka, BJP state president B Y Vijayendra, MLAs Dr C N Ashwath Narayan, Sunil Kumar, and others barged into Khader’s chambers. Chaos ensued as shouting and hollering echoed through the halls, prompting marshalls to intervene.

“The Speaker was warned that if he continued behaving this way, we would boycott the session,” Narayan stated afterward.

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