Business Standard

#Islamic #banking will be most relevant to SME sector: Interview with Zafar Sareshwala

Interview with director and head of Islamic Corporation for Development's India operations.
For the first time, the Jeddah-based Islamic Development Bank has forayed into a non-member country by announcing setting up of a non-banking financial company in India through its 100% subsidiary Islamic Corporation for the Development of the private sector. Based on the Islamic principle of not charging interest on loans, ICD will operate through a registered office in Mumbai, with prominent businessman from Gujarat, Zafar Sareshwala, heading its India operations as director. In an interview with Vinay Umarji, Sareshwala talks about how the NBFC will play a catalyst for small businesses by sharing their profits and losses instead of charging interest on finance extended.

What kind of entity is Islamic Development Bank setting up in India? How will it function?

Islamic Development Bank looks at introducing Islamic financing

Islamic Development Bank (IDB) is set to initiate talks with the Reserve Bank of India to allow them to introduce Islamic Financing in India. Islamic finace refers to the ways by which corporations who are a part of the IDB group, including banks and other lending institutions, raise capital in accordance with or Islamic law. IDB is also looking at starting interest-free banking in the country wherein instead of extending cash loans, the lender buys and leases the product for which the loan is required. And it earns rental on it.

Essel Finance to launch $100-mn Shariah fund

Essel Finance is planning a Shariah fund for foreign investors in real estate. The Shariah fund will have a corpus of $100 million (Rs 620 crore). The fund is looking to close the fund forge partnerships with Shariah funds by February-March. Amit Goenka, chief executive officer, Essel Financial Services said the Shariah partner would offer the fund on its behalf and once the company gets its licence for the offshore fund it was planning, it would bring the Shariah component under its fold. Essel's offshore vehicle may also get its investors to directly invest in real estate projects here and not route it through the fund. The offshore fund has planned a corpus of $200 million. Its domestic fund does debt deals and charges developers with coupon rates of 18 to 19 per cent.

More investors eye entry into Shariah-based funds

Indian private equity firms are more and more interested about entering Shariah-based funds market. According to Taqwaa Advisory and Shariah Investemt Solutions, there are at least six financial institutions with plans to issue Shariah-compliant funds in India.


India's first Islamic bank to start in Kerala by 2010

The first Islamic bank in India with involvement of the Kerala government is likely to start operations in Kochi next year as the bank’s registration formalities are currently being fulfilled on a war footing, reported George Joseph in Business Standard. Kerala State Industrial Development Corporation (KSIDC), which is the designated agency for the formation of the bank, will have 11 % stake, which will be registered as a non-banking finance company (NBFC) in the beginning and later get transformed into a full-fledged Shari’ah-compliant bank.

The project proposes to raise an initial capital of Rs 500 crore from leading non-resident Indians (NRIs) and Indian business houses. According to sources close to the development, leading NRI businessmen such as Mohammed Ali, MA Yusuf Ali, CK Menon and other Kerala-based industrialists such as Azad Mooppan have shown keen interest in the venture.

Parsoli promoters barred from trading

Zafar and Uves Sareshwala, promoters of broking firm Parsoli Corporation, were debarred by the Securities and Exchange Board of India (Sebi) after they were found to have fraudulently transferred shares of genuine investors to their own accounts.

Syndicate content