IslamicFinance.de

Kerala offers huge potential for setting up financial institutions based on Islamic tenets, given its strong historical ties with West Asia and a large Muslim population that adheres to investment norms prescribed by Sharia. Islam prohibits giving or receiving of interest, which it categorises as usury. It does not prohibit trading and investment but advises followers to share risks. It tells the investor to share the loss, just as he would have shared the profit, in case the investment makes a loss. The West has successfully repackaged this investment process as Islamic banking. Kerala is trying to follow that path.