Kerala FM moots Islamic bank idea

THIRUVANANTHAPURAM: In the backdrop of a growth crunch in the Gulf countries that could lead to large-scale job losses, Kerala is mulling the idea of establishing a bank that would run according to Islamic banking principles, with the idea of funding welfare programmes for returnee non-resident Keralites.

State finance minister T M Thomas Isaac said the government would consider the option of setting up a bank that runs on Islamic banking principles, in which depositors would get a share of profits instead of interest.

The state government, he said, hoped to get funds from such an institution to take up welfare measures aimed at expatriate Keralites who have returned following job losses abroad.

The state budget had proposed to set aside Rs 100 crore to be given to NRIs in low-interest loans, and the Kerala Financial Corporation has been entrusted with the task of managing funds aimed at rehabilitation of non-resident Keralites who have returned.