By Shaik Zakeer Hussain Bengaluru: A new Shariah-compliant investment company called Mount Judi Ventures was launched in Bengaluru on Saturday, to fund seed stage, growth stage and established businesses, which are primarily based in India. The company plans to soon float a SEBI registered Alternative Investment Fund (AIF-II) category venture capital fund, and targets to raise $10 to $15 million, with an expected annual return on investment of 18% for the fund. An offshoot of Rehbar Financial Consultants, Mount Judi Ventures grew out of the need to finance large-scale investments, which the former could not support due to its mandate to fund only small- and medium-size businesses. Mount Judi will operate independently of Rehbar, its Co-founder and CEO Mudassar Ali Baig told The C...
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Posted Date: 11 April 2017

NEW DELHI: No deadline has been set for introduction of Sharia or interest-free banking in India, the Reserve Bank of India (RBI) has said. Islamic or Sharia banking is a finance system based on the principles of not charging interest, which is prohibited under Islam.  The RBI had earlier proposed opening of "Islamic window" in conventional banks for gradual introduction of Sharia- compliant banking. Responding to an RTI application, the RBI said it has not taken any step to introduce Islamic window in banks for gradual introduction of Sharia-compliant interest-free banking in India. "RBI has not set any deadline for introduction of interest-free banking," the central bank said in response to the RTI query filed by PTI. However, on the instruction of t...
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Posted Date: 09 April 2017

KUWAIT: Warba Bank, the best investment bank in Kuwait as well as the best corporate advisory, achieved international success in its maiden sukuk issuance exercise – the issuance of USD 250.0 million Tier 1 Mudaraba Capital Certificates. A one week marketing campaign succeeded in attracting investor interest worth approximately $1.3 billion from Kuwait, Dubai, Hong Kong, Singapore and London attaining an oversubscription of more than 5 times the sukuk issuance size.  The bank’s CEO, Shaheen Hamad Al-Ghanem, said that Warba Bank’s success in attracting such diverse and deep investor interest reflected the confidence of the investment community in the bank’s performance and its future as crafted in its 2017-2021 Strategic Plan.   The callable $250.0 mil...
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Posted Date: 09 March 2017

KOCHI: Finance Minister Thomas Isaac had embraced Islamic Banking in a big way in his previous budget. But eight months later, the interest- free endeavour failed to find a place in his latest financial blueprint for the state. This has left the Cheraman Financial Services in dismay. The Non- Banking Financial Company with equity participation of the Kerala State Industrial Development Corporation (KSIDC) is yet to play a major role as envisaged in the 2016 budget. The firm also incurred a loss of Rs 56.44 lakh last year. “We expected the Finance Minister to deliver on the announcements about Shariah investment made in the previous budget,” said National Committee on Islamic Banking convener H Abdur Raqeeb. “As a strong proponent of Islamic Banking, we believe h...
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Posted Date: 06 March 2017

CANT SHARE DETAILS OF GOVT RESPONSE ON SHARIA BANKING: RBI   New Delhi, Feb 27 (PTI) The response given by the Finance Ministry on an RBI report about the introduction of Sharia banking in India cannot be disclosed, the central bank has said. The Reserve Bank of India (RBI) was asked to give the copy of the letter sent to it by the ministry on the recommendation of its Inter Departmental Group (IDG) regarding Islamic banking. The central bank had sought response from the Department of Financial Services (DFS) under the finance minister whether their letter can be disclosed under the Right to Information (RTI) Act.   "In this regard we have been advised by the DFS, Government of India that the letter is exempt und...
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Posted Date: 27 February 2017

THERE’S NO BANKING WITHOUT INTEREST Mohamed Ashrafulla   Indian Muslims, many of them small-scale entrepreneurs, will benefit from shedding their opposition to mainstream banking Muslims in general avoid ‘banking’. The reason is that the institution of interest (‘riba’ in Arabic) is regarded as ignoble because the Holy Qur’an strictly prohibits interest-based transactions in all forms. But, in the modern economic and banking systems of all countries, interest has become completely institutionalised. The questions that arise are whether there is an independent Islamic economics, is it a discipline all its own, and is it in practice among Muslims. Islamic economists argue that an independent Islamic economics has been defined in accordanc...
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Posted Date: 22 February 2017

RAPID ISLAMIC FINANCE GROWTH BRINGS CORE CHALLENGES TO MEET  The world's largest and most important markets for Islamic finance Malaysia, Indonesia, Saudi Arabia, Bahrain, Qatar, UAE, Kuwait, Pakistan and Turkey are expected to grow their combined assets to no less than 1,757bn, almost double the volume they had at the end of 2015, according to consultancy EY. This rapid growth is driven by 'significant unmet demand, says Abdulaziz al-Sowailim, chairman and CEO of EY's Mena unit, adding that 'despite the prevailing macroeconomic and political situation across a number of emerging markets, forward-looking industry projections remain generally positive. The industry is shaped by economic growth in emerging markets with Muslim majority such as in Southeast Asia, where the A...
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Posted Date: 20 February 2017

3 BUSINESS PRINCIPLES OF ABDUL RAHMAN IBN AWF WHICH EARNED HIM 13,545 TONS OF GOLD   Most of us consider that a huge amount of money, as well as a highly equipped best team of experts or professionals, is necessary to start a business. But according to historiographer and modern scholars to start any business the only thing required is passion and skills. According to many scholars, the significance and the depth of the word Tajir are more than the word Entrepreneur so it is better to use the word Tajir because the word is not limited in its value system. The first rule of business is to practice this essential principle: The belief that Allah will give you the best if you put in the work. Success and achievements in business come to those who have a clear vision of their d...
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Posted Date: 18 February 2017

CHINA-PAKISTAN-ECONOMIC-CORRIDOR (CPEC) AND ISLAMIC FINANCE A Unmissable opportunity for Sukuk issuance The China-Pakistan Economic corridor (CPEC), also known as One-Belt-One-Road (OBOR) is being referred to as the game-changer. About year and a half ago, I researched it and wrote about it in ‘Greater Kashmir’. The way things have unfurled in CPEC hitherto makes me reiterate even more confidently what I predicted then. This project covers 60 countries and 27 of them are Muslim nations. It reduces the distance of Western China to Europe by 5000kms, which roughly translates to 45 shipping days. Those who know international business can gauge the significance of 45 days. The $54 billion dollar investment is being spent to come up with the new roads, renovate and broaden ...
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Posted Date: 15 February 2017

FINANCE MINISTER THOMAS ISAAC TO POOL RS 10,000 CRORE OFF BUDGET   THIRUVANANTHAPURAM: On July 8,  when Finance Minister Dr T.M. Thomas Isaac presents his ‘Alteration Memorandum,’  he is expected to target an off-budget capital infusion of Rs 10,000 crore for the 2016-17 fiscal. To achieve this, Dr Isaac will bank on two unique instruments: one, a special purpose vehicle to bring in funds for infrastructure development, and the other, an ‘Islamic bank’ to get funds locked up in the Gulf for big projects that further a social cause. The SPV, which will do the borrowing for the government, will be created out of autonomous bodies like Road Fund Board or Roads and Bridges Corporation. But first, Dr Isaac will restructure these companies and an ...
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Posted Date: 14 February 2017

ALTERNATIVE BANKING:  Why Islamic Banking is said to be irrelevant for India?
ALTERNATIVE BANKING Why Islamic Banking is said to be irrelevant for India?   Syed Zahid Ahmad Srinagar, Publish Date: Feb 9 2017   In 2006 the RBI’s Working Group to examine the financial products used in Islamic banking stated that ‘as distinct from modern, conventional banking, Islamic banking due to its inextricable influence of religious doctrines has often evoked a sense of mysticism and curiosity’. RBI officials despite being financial professionals took ten years to apprehend and make recommendation about Islamic banking windows. Besides Deepak Mohanty Committee and Inter Departmental Group, the Central Board of RBI was also convinced that Islamic banking would be helpful for financial inclusion in India. But the way State Finance Min...
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Posted Date: 09 February 2017

BLOW TO ISLAMIC BANKING IN INDIA In spite of RBI’s green signal, the government says No ?   Before handing over his charge to present RBI Governor Urjit Patel, former Governor of Reserve Bank of India Raghuram Rajan had proposed working with the Government to introduce Islamic Banking (interest-free banking) to tackle financial exclusion of a vast Muslim population, who for religious reasons do not go for traditional banking.   RBI in its 2016 annual report had given its clearance for opening Islamic Banking windows across India. The proposal in this regard was seen as a major shift in the stance of Reserve Bank which earlier had said that Islamic finance could be offered through non-banking  channels like cooperative societies and other investment models.&...
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Posted Date: 24 January 2017

Muslims from across Ahmedabad assembled at the Gujarat Chamber of Commerce and Industry (GCCI) to deliberate on the need to have Shariah-compliant banking to harness community finances, a demand that is fast growing. Experts from across the religious spectrum converged at the Conference on Islamic Banking & Microfinance in India under the aegis of Jamaat-e-Islami Hind. Islamic banking, a window within conventional banking system, helps invest in products that comply with the Islam which prohibits earning of interest. Shariah does not allow investment in banks as earning of interest or paying interest on loan is considered un-Islamic. It also does not allow investment in companies that invest in equities considered haram or into speculation or gambling. “However, Shariah allo...
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Posted Date: 22 January 2017

India’s path to introducing Islamic banking continues to be strewn with regulatory, political and perception hurdles, with a recent proposal by the country’s central bank, the Reserve Bank of India (RBI), to introduce Islamic windows at conventional banks being given short shrift by the finance ministry.  Minister of State for Finance Santosh Kumar Gangwar told Parliament in early December 2016 that “even to introduce limited products, various legal changes would be required”, highlighting the challenges of operating multiple different banking systems in a country that already has conventional and cooperative lenders. The RBI’s recommendation to introduce Islamic windows was based on its findings that ‘some sections of the Indian society have re...
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Posted Date: 16 January 2017

Gandhinagar: India will soon have Islamic banking facilities with the Saudi Arabia-based Islamic Development Bank (IDB) set to start its India operations from Gujarat, the Gulf kingdom’s envoy in New Delhi said on Wednesday. “I would like to point to a very important development in our cooperation with the state of Gujarat, and that is Jeddah-based Islamic Development Bank (IDB) is set to start its India operations from Gujarat,” Saudi Ambassador to India Saud Al Sati said at the Vibrant Gujarat Global Summit here. During Prime Minister Narendra Modi’s visit to UAE in April last year, the Indian Exim Bank had signed a memorandum of understanding with IDB for a $100 million line of credit to facilitate exports to IDB’s member countries. “The IDB als...
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Posted Date: 12 January 2017

A few months ago, reports that the Reserve Bank of India (RBI), the national banking regulator, was planning to introduce rules that would allow banks to start Islamic banking divisions had excited groups that want these type of financial services in India. Islamic banking is run on religious principles that consider the taking and giving of interest as sin. Customers earn returns on investments through equity, lease rents and dividends. India does not have norms for such services. According to the promoters of this kind of financial service, scriptures of other religions, including Christianity, Judaism and Hinduism, mention the taking and paying of interest as wrong.  This column had reported that a major public sector bank had announced that it will start a division that will ...
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Posted Date: 02 January 2017

By Dr Shariq Nisar Shariah banking, PLS banking, Ethical banking, Interest-free banking are different names used to identify Islamic banking which primarily works without relying on interest mechanism. Interest is strictly prohibited in Islam and therefore many countries especially those where Muslims live in majority have developed an alternate way of banking where profit is earned by banks through trade and investments rather than pure lending. Since early nineties, many developed countries took great interest in this new form of banking to attract investments from energy rich Arab world and also to improve financial inclusion of the domestic population which was hitherto shying of making full use of banking facilities due to religious concerns.   In India, while interest-fr...
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Posted Date: 02 January 2017

Observing a series of side effects created by demonetization, the desperate government is now working under pressure and has perhaps lost the courage to take bold decisions. It has also lost the wisdom, and is working under pressure of alliances. The pressure was built by allied political parties like Shiv Sena and AIADMK to oppose banking windows in the name of religion. On 7th December 2016, Shiv Sena MP Shri Chandrakant Kahire made a plea against allowing ‘Islamic banking window’ in banks, during zero hour in Lok Sabha. On 9th December M.P. Smt. K. Maragatham from AIADMK party specifically asked the Minister of Finance in the lok Sabha if the Reserve Bank of India (RBI) has a proposal to open the Islamic window in conventional banks for gradual introduction of Sharia co...
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Posted Date: 01 January 2017

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