State government -aided Islamic bank coming up in Kochi soon! A meeting will be held on September 12 at Kozhikode to discuss the steps to be taken to set up the first Islamic bank in India. The Kerala State Industrial Development Corporation (KSIDC) would have 11 percent stake in the proposed banking firm. It will be registered as a Non-Banking Finance Company (NBFC) in the beginning and later on will be transformed into 100% Shariah-compliant bank.
An initial capital of Rs 500 crore (Rs 5 billion) will be mobilized from leading non-resident Indians (NRIs) and Indian business houses. The bank will invest all its funds in wealth generating investment avenues and will distribute profit to its shareholders. Also the bank will set apart a social fund to provide interest-free loans to Gulf returnees to set up small-scale ventures. As of now, registration formalities will be completed by the end of this year. This will be the first Islamic Bank in India which is set to be operational by mid 2010.