KERALA, the communist-ruled state that relies on Middle East remittances for a quarter of its economy, plans to sell the nations’s first Islamic bonds next year to help pay for infrastructure projects. “The way we see it, it’s another form of venture capital,” finance minister Thomas Isaac said in an interview at Thiruvananthapuram. “We need longgestation funds to build airports, hig-speed trains and expressways. Islamic finance promises unexplored potential in that context.”
Kerala is helping start A1-Barakah Financial Services to sell the rupee denominated bonds and create in vestment funds that comply with Shariah law’s ban on interest, Issac said. The venture will tap Indian Muslims and money sent home by workers living in Gulf countries even as a debt crisis in Dubai threatens to shrink the remittances, he said.
Islamic finance may help India raise the $500 billion it needs to spend on infrastructure by 2014 as it seeks to sustain the second-fastest pace of growth among major economies, according to national government estimates. Islamic bond sales almost doubled to a record $31 billion in 2007 on Arab oil earnings before plunging last year as the collapse of Lehman Brothers Holdings shuttered credit markets, according to data compiled by Bloomberg.
Islamic bonds, also known as sukuk, are asset-based securities that pay a profit rate to investors to comply with Shariah’s prohibition of interest and speculation. “India, if opened up for Islamic banking is the big prize,” Afaq Khan, Dubai-based chief executive officer of Standard Chartered’s Islamic banking unit, said in a telephone interview. “its large Muslim population and strong growth promise excellent opportunities for releasing a lot of funds into the documented economy.” Muslims make up approximately a quarter of Kerala’s population and 13.4% of India’s 1.1 billion people, according to government data. Only Indonesia and Pakistan have more inhabitants who adhere to the religion.
Kerala is helping start A1-Barakah Financial Services to sell the rupee denominated bonds and create in vestment funds that comply with Shariah law’s ban on interest, Issac said. The venture will tap Indian Muslims and money sent home by workers living in Gulf countries even as a debt crisis in Dubai threatens to shrink the remittances, he said.
Islamic finance may help India raise the $500 billion it needs to spend on infrastructure by 2014 as it seeks to sustain the second-fastest pace of growth among major economies, according to national government estimates. Islamic bond sales almost doubled to a record $31 billion in 2007 on Arab oil earnings before plunging last year as the collapse of Lehman Brothers Holdings shuttered credit markets, according to data compiled by Bloomberg.
Islamic bonds, also known as sukuk, are asset-based securities that pay a profit rate to investors to comply with Shariah’s prohibition of interest and speculation. “India, if opened up for Islamic banking is the big prize,” Afaq Khan, Dubai-based chief executive officer of Standard Chartered’s Islamic banking unit, said in a telephone interview. “its large Muslim population and strong growth promise excellent opportunities for releasing a lot of funds into the documented economy.” Muslims make up approximately a quarter of Kerala’s population and 13.4% of India’s 1.1 billion people, according to government data. Only Indonesia and Pakistan have more inhabitants who adhere to the religion.
Indian Rupee Exchange Rate
0 comments:
Post a Comment