Indian Court Rejects Government Involvement In Islamic Bank

In the Indian state of Kerala, a 2-judge bench of the High Court held that neither the state nor any of its instrumentalities may be involved with the creation of an Islamic banking institution. According to today's Business Standard and The Peninsula, the ruling came in a public interest lawsuit that alleged government involvement in a Shariah-compliant bank would amount to unconstitutional preference for one religion. The Kerala State Industrial Development Corporation (KSIDC) had planned to take a 13% interest in the Islamic bank. However under the ruling, promoters may go ahead and organize the bank without state involvement, so long as the proper procedures are followed and the required permissions obtained.