This is good news. Kerala has made the right step in financial liberalisation. Islamic banking is a significant alternative asset class to the bond market investors.
Currently, all scheduled banks are forced to keep interest rates ahead of the PLR set by RBI. This passes the inflation cost to the borrowing company which will eventually pass it on to the unsuspecting customers. This vicious cycle is broken by interest-free credit available with Islamic banks.
Also, these are private banks. So, government interference and ownership is out of the question. So Islamic banks are ideal vehicles to market bancassurance and microfinance products.
Secularism means acceptance of all persuasions not avoidance of all persuasions. Kerala has finally got the message.
I wish the Islamic Bank of Kerala to emerge as successful as the Islamic Bank of Britain.
Non-Muslims too are welcome to become customers of Islamic mortgages and sukuk-insurance products.
Re: Re: Good news to beat inflation
by mo anj on Feb 04, 2011 10:19 PM
if you are serious you need to understand the way the islamic bank functions, it functions something like this the bank becomes a partner not only in profit but also on losses so obviously the cumulative interest burden does not bend the spine till it collapses which is normal with all other banks
Re: Re: Re: Good news to beat inflation
by Uday Kulkarni on Feb 04, 2011 11:40 PM
Mr Mo ani; who told you that normal banks charge interest until the spine is broken ??? Which century do you live in ??? Interest rates of different banks are different in each country and depend on many variables that govern the economy of the country. For eg : In Japan where the inflation rates are so low; the interest paid on deposits are 1 % and 2% and loans charged at 3%. Similarly; in India because the inflation rates are so high; the interest rates are in doubkle digits. Again in USA; the US federal bank prime lending rate is 0% today because of the economic scenario. Please do NOT try to mislead people here that Islamic bank is better because it charges less or no interest rates??? Every one is NOT stupid. Don't get too excited my friend. The Islamic bank model is a complete failure in a free economic society and as I have mentioned repeatedly does not match up to the realistic situation as it defies the basic law of "Money's worth" and Future value of Money & diregards existence of inflation. Any bank which is based on fundamentals which oppose the basic law of nature cannot survive for long unless it is ammended at least by making some superficial modifications like Sukuk as I mentioned above. PLEASE DO NOT JUSTIFY 1400 years old logic. Please spare us and many other readers. You have a right under constitution and do it but don't mislead
Re: Good news to beat inflation
by Uday Kulkarni on Feb 04, 2011 11:25 PM
sukuk-insurance and sukuk bonds were inovated by noted islamic scholars sometime in 2004/5 and including renowned shariah scholar Sheikh Muhammad Taqi Usmani who all came up with the idea of Sukuk bonds and the first Sukuk bonds were issued in Malaysia in 2004 followed by many banks in UAE/Bahrain in 2008/09. The world bank in 2009 listed its first $100 Million bonds but all Sukuk bonds mean is instead of taking interest, makes the depositors as investors and or owners/shareholders . Well this is just bypassing the laws but mean nothing but same. It is exactly what UAE government did by building a Casino in a structire in sea because gambling is illegal but what if gambling was done in the sea and not on land ??? Such logics are just circumventing the rules to convince die hard Islamists but in reality ; they are indeed interests and nothing different. How are Sukuk bonds different than say any AAA grade government bonds ?? I see so many people trying to justify Islamic banking of not charging interest. anyways LONG LIVE SUKUK.
This is another step towards reestablishing the great mughal empire India that was lost somehow due to British invasion and occupation of India and subsequent partition of India and division of Muslim power. I believe implementation of sharia law should be the next step. All devout Muslims and secular Hindu brothers should unite to make this a reality.
Re: THIS IS A HISTORICAL DAY
by Loan Shark on Feb 04, 2011 10:04 PM
relax .... think of it as a cooperative bank that doesn't pay int on deposits and loans money on low rates
Re: THIS IS A HISTORICAL DAY
by BJPisownedby Reddybrothers on Feb 04, 2011 10:18 PM
ISLAMIC BANKS ALLOWS TERRORISM MONEY... SO BJP THE TERROR PARTY OF INDIA IS VERY INTERESTED IN OPENING AN ACCOUNT
The change has come.. No more will the poor people and the farmers have to abandon education for their children, commit suicide, be pressurized due to compounding exponential interest rates. This is a true revival for the most downtrodden sections of the society. Just wait and watch the economic revolution it stirs.
People who look at through the eyes of religion need to zoom in on the system. Take your time to understand the Islamic SYSTEM of banking. this change is for EVERYONE for all the POOR PEOPLE. enough of atrocities in the name of interest. enough of suffocating the poor and feeding the rich..
Re: No more farmer suicides..
by Ramakrishna Rao on Feb 04, 2011 09:52 PM
i live in South africa.i have seen how islamic banking working here and in kenya.its utter flop and big nuisance and on the verge of collapse not only here but in countries like malaysia as well
Re: Re: No more farmer suicides..
by Yasir Ahmed on Feb 04, 2011 09:56 PM
wow.. Islamic banks are the only ones not to be threated by the recession.. its unique profit-loss sharing method enables this. it is already working wonders in the lives of millions worldwide and there are over 300 Islamic banks around the world. there are many reasons an enterprise can fail - if it is not managed well or staffed well or planned or invested well, even the best ideas can take a beat. so as per ur statement, we need to get very specific.
Re: Good !
by Yasir Ahmed on Feb 04, 2011 09:47 PM
watever ur judgement, u r actually right. no longer will indian muslims invest in banks abroad if there is an interest free system here itself.
Re: Re: Good !
by Ramakrishna Rao on Feb 04, 2011 09:54 PM
the word interest is substituted with profit.its no different otherwise.islamic banks are there in pak for a long time.that country is a failed nation and on the verge of collapse
Re: Good !
by mo anj on Feb 04, 2011 10:25 PM
and what about those patriotic brothers of yours who have raped,looted india and stacked money in safe heavens(Swiss banks) which are of no use to the country
Tomorrow we will have HindBank/Sikh bank/Christian Bank/DalitBank/Brahmin Bank/Sunni Bank/Shia Bank. This govt will divide India to the hilt, due to appeasement only. Pls save our country.
