New Delhi, February 3 Islamic economist Dr Mohammed Manzoor Alam has hailed the Kerala government announcement to launch an interest-free monetary institution in the state. Talking to media-persons in an informal chat here today, Dr Alam, who is also President of the Indo-Arab Economic Cooperation Forum (IAECF) and Institute of Objective Studies (IOS), said it was a right decision in the present circumstances.

He said the IAECF in collaboration with the IOS had on August 31-September 1, 2007 organized a two-day international conference on interest-free banking in the name of “participatory banking”. On that occasion it also passed a three-point resolution. He said there was very much possibility of interest-free institutions and banks in India. He hoped the Central Government would also follow the precedent set by the Kerala state government.  

It is to point out that Industries Minister Elamaram Kareem on February 3 informed the Kerala Legislative Assembly that the state government was starting an interest-free monetary institution. In a written reply to Opposition legislator C T Ahmed Ali, he said the new institution would raise funds from individuals, non-resident Indians, foreign investors and foreign institutional investors (FIIs). "The maximum stakes that an individual could accumulate was fixed at nine percent and for FII's it was 24 percent," Kareem said.

He said a 17-member board had been set up and its first meeting was chaired by prominent Middle East businessman P Mohammed Ali. Another Middle East businessman C K Menon is its vice chairman. Included in the board are three top government officials. Of the remaining 14, 12 are from the Muslim community who are top businessmen, either in Kerala or abroad.

Muslims in Kerala today is the second largest community with close to 24 percent of the 3.20 crore population. According to a study done by S Irudayarajan of the Centre for Development Studies (CDS), 48.20 percent of the 18.48 lakh non-resident Keralites as on 2007 are Muslims. Likewise, of the total remittances of Rs 24,525 crore received in the state as on 2007, remittances by Muslims accounted for 12,158 crore.

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Kerala Launching Interest-Free Monetary Institution