Thiruvananthapuram, Friday, February 04, 2011: The State government today welcomed the High Court’s verdict allowing the setting up of an Islamic Financial Institution (IFI) in the state with the support of Kerala State Industrial Development Corporation (KSIDC) and said the institutions would start soon. The verdict is historically important in terms of the infrastructure development of the state and a recognition to the state government’s stand that the company, following Shariah Guidelines, is not against the secular principles of the country, state Finance Minister T M Thomas Issac and Industrial Minister Elamaram Kareem told a joint press meet here today.

“The state government welcomes the verdict completely. We have decided to partner with Al Barakah Financial Services Ltd, a non-banking facility following Shariah principles, after many studies and discussions”, Issac said. “The government is promoting a number of mega projects and the new institution will be able to mobilise unutilized resources from Gulf-based NRIs and institutions for the developmental projects in the state, “Thomas Isaac said.

The Kerala High Court yesterday dismissed the petitions, filed by Janata Party leader S Subramanian Swamy and Hindu Aikya Vedi, against the setting up of an IFI saying that the petitioners could not demonstrate how the government decision had the effect of directly promoting a particular religion. Without lending loans on interest base, Al Barakah Financial Services Ltd would invest in various long-term development projects in the state after examining its viability and would share profit with the government, Issac said.

“Though it follows Shariah Guidelines, it does not mean that the institution is for a particular religion or community. The director Board of the company has a number of members from religions other than Islam. The only aim of the facility is to mobilise money for public ventures, “Issac said.

State Industrial Minister Elamaram Kareem said the company would not indulge in any interest-based funding nor indulge in activities which were prohibited under Shariah such as liquor business, gambling, movies and tobacco.”The company will invest in various sectors like power and water projects, transport sector, industrial infrastructure, IT infrastructure, tourism infrastructure, port and airport development, rail infrastructure and mass transportation, inland waterways development and roads, bridges and flyovers, “Kareem said.

The Al Barakah Financial Services Ltd will have an authorised share capital of Rs 1000 crores including 11 per cent Equity contribution from KSIDC. The 12 member-director board of the company will have 10 private investors and 2 nominees from KSIDS as directors.”Gulf-based NRI businessman P Mohammed Ali will be the chairman of the company. Various Kerala-based entrepreneurs like P N C Menon, E M Najeeb, M A Yusaff Ali, Siddique Ahmmed and P A Ibrahim Haji will be some other members of the board,”he said. The board meeting would be held soon and the company was expected to become operational this month itself, the ministers said.

(News Agency)