Kochi: India should open interest free banking windows in conventional banks as a pilot project, reports PTI quoting Muddassir Siddqui, a leading authority on interest free banking.
Making a strong plea for launching Islamic banking in India, Mr Siddqui, partner and head of Islamic Finance, Middle East, SNR Denton and Company, told reporters here that there was lot of 'misunderstandings' regarding Islamic banking in India. 'We are just asking for level playing field. We want it in conventional system. We do not want any favours', he said.
On issues relating to recovery in cases of loan defaults, he said it is done the same way as conventional banking.
When pointed that the Union government had in a counter affidavit filed in the Kerala High Court on 9th Sept stated that 'it was not legally feasible for banks in India or its branches abroad to undertake Islamic banking activities', he said discussions had been held with Union finance ministry officials and Reserve Bank of India (RBI) regarding Islamic banking. Recently, some documents were submitted to RBI. Several round of discussions have also been held with RBI officials, he said.
'We held close interactions with finance ministry and RBI officials. We hope the ice is breaking', he said.
There was no time frame for setting up Islamic banking.
'We are hopeful permission would be granted very soon'
Currently, close to $1 trillion is being managed by about 400-500 Islamic banks worldwide and by 2020, it is expected to touch $4 million.
The adoption of interest free banking system in the country offers a great opportunity to attract substantial investments from countries in the West Asian region to India, he said adding institutions and high net worth individuals from these countries are looking forward to investment opportunities in India.
According to projections by global consultant McKenzie, investment surplus in the west Asian region is expected to be around $9 trillion by 2020. Currently the investment surplus is around $1.5 trillion. India can attract a good portion of this huge investment potential by developing the appropriate regulatory framework, Abdur Raqeeb, ICIF said.
Regulatory framework suitable for interest free banking will not have any impact on the existing financial system in the country, he said.
A two day conference on Islamic Finance in India is being held from tomorrow to create awareness about the banking system.
The Kerala High Court had in April this year directed the state government and its institutions not to participate financially or otherwise in the financial company modelled on the lines of Islamic bank.
Profit booking took away most of the gains accrued in the early session today. While the market had a fairly decent opening, selling pressure in heavyweights led the indices near their opening levels at the end of the session.
The market opened with good gains this morning with the indices scaling fresh 33-month highs in early trade, aided by supportive global cues. The BSE Auto index surged to 9,947, a new all-time in today's trade. Subsequently, the market witnessed a gradual decline on profit taking with the benchmarks nearing the neutral line. The negative opening of the influential European bourses added to the woes, ensuring that the Indian market ended flat albeit with a positive bias.
Finally the Sensex shut at 20,475, up 30.69 points (0.15%), after attaining a high of 20,706 and a low of 20,437 towards the end of the session. The Nifty rose 16.05 points (0.26%) at 6,159. The benchmark swung between a high-low of 6,222 and 6,144, respectively.
The market breadth was almost equated at the end of the day's trade. The Sensex closed with 14 advancing stocks against 16 declining stocks. The Nifty had 28 stocks in the green while 22 ended lower. The broader indices outperformed the benchmarks today; the BSE Mid-cap index gained 0.69% and the BSE Small-cap index rose 0.33%.
The top Sensex gainers were Mahindra & Mahindra (M&M) (up 2.51%), Reliance Communications (RCom) (up 2.38%), HDFC (up 2.35%), Jaiprakash Associates (up 2.06%) and ICICI Bank (up 2%). The main losers were ITC (down 1.90%), Sterlite Industries (down 1.88%), Hero Honda (down 1.85%), Bharti Airtel (down 1.57%) and Larsen & Toubro (L&T) (down 1.54%).
In the sectoral space, BSE Healthcare (HC) (up 1.69%) BSE Consumer Durables (CD) (up 1.47%), BSE Bankex (up 0.79%) and BSE Auto (up 0.63%) were the notable gainers while BSE Fast Moving Consumer Goods (FMCG) (down 0.71%), BSE IT (down 0.37%) and BSE TECk (down 0.32%) led the losers list.
Markets in Asia closed mostly in the green on speculations that the growth projections in the region will have an impact on corporate earnings. Investors in Japan appeared cautious ahead of the outcome of the Bank of Japan meeting, due on Tuesday.
The Hang Seng surged 1.17%, Jakarta Composite was up 0.63%, Straits Times gained 0.85%, Seoul Composite rose 0.14% and Taiwan Weighted added 0.02%. On the other hand, KLSE Composite was down 0.28% and Nikkei 225 shed 0.25%.
India's mutual fund (MF) industry shrugged off the quarter-end withdrawal jitters for the first time since June 2009, with the assets under management rising 3.7% in September.
The industry's average assets under management (AUM) rose by Rs25,721 crore, or 3.74%, in September compared to last month. The combined average AUM of 39 fund houses stood at Rs7,13,280.78 crore at the end of the September quarter.
The last time the industry witnessed an increase in AUM on a quarter-ending month was in June 2009.
The US markets closed modestly higher on Friday, recovering some of the losses of previous session. Stocks rose in early trade on signs of strong growth in Chinese manufacturing. The Institute for Supply Management said its manufacturing index showed that factory activity was still expanding in September, although not quite as fast as analysts had hoped and slightly slower than the month before. Personal income and spending both rose more than expected in August. The Dow gained 41.63 points (0.39%) to 10,829. The S&P 500 gained 5.04 points (0.44%) to 1,146. The Nasdaq gained 2.13 points (0.09%) to 2,370.
The forthcoming public offers of Coal India Ltd (CIL) and Steel Authority of India Ltd (SAIL) can be a roaring success if the debut history of 28 PSUs since 2003 is any indication, as 94% of these public sector companies (PSUs) listed with a premium of at least 10% on the bourses.
An analysis of 28 PSU stake sale offerings, starting from UCO Bank in 2003 to Engineers India Ltd (EIL) in 2010, shows that in comparison to the total issues, 63% of the offerings have generated significant value for investors over the issue price as of 29th September.
Foreign institutional investors were net buyers of stocks worth Rs1,825 crore on Friday. Domestic institutional investors were net sellers of equities worth Rs671 crore on the same day.
Tata Steel (up 0.28%) on Sunday increased prices of its products by up to Rs1,500 per tonne, mainly on account of rising demand.
Industry experts said that around 3% increase announcement by the leading steel major may jack up the rates of its various products by Rs1,500 a tonne.
The move by Tata Steel follows similar hike by the steel makers like SAIL, JSW and Essar Steel last week.
GMR Infrastructure's (down 0.09%) subsidiary GMR Energy Limited (GEL) has bagged two contracts for a transmission project being implemented by Rajasthan Rajya Vidut Prasaran Nigam Ltd (RRVPNL). The projects were awarded on a Build, Own, Operate and Maintain (BOOM) basis.
The entire concession period of the projects is 25 years, including the construction phase, which is estimated to take two years. The projects would include setting up 400 km of 400 KV transmission lines with two power substations based at Alwar and Deedwana.
Hinduja Group flagship firm Ashok Leyland (up 2.80%) today reported a 90.22% jump in commercial vehicle sales to 10,363 units in September as compared to 5,448 units in the same month last year.
Domestic sales stood at 9,513 units in September as against 4,809 units in the same month last year, up 97.82% while exports increased by 33.02% to 850 units during the month, compared to 639 units in the year-ago period.
New Delhi: Seeking viable solutions to make India slum-free, the government today invited banks, other financial institutions and the real estate sector to use its interest subsidy scheme for construction of affordable houses for urban poor, reports PTI.
"There is a need for credit enhancement through appropriate fiscal, legal and institutional mechanism to ensure the flow of capital to realise the vision of slum free India," housing and urban poverty alleviation minister Kumari Selja said here on the occasion of World Habitat Day.
The theme of the World Habitat Day for this year is "Better city Better life".
"I invite all the stakeholders particularly the banks, financing institutions and the real estate sector to come forward to make use of the opportunities offered by our schemes such as Interest Subsidy Scheme for Housing the Urban Poor and the Scheme for Affordable Housing in Partnership and to work hand-in-hand to find viable solutions which make a positive lasting impact on our cities," she said.
The urban population is expected to increase manifold in the next two decades. In the absence of proper homes, people are forced to reside in inhabitable and often unsafe places.
According to the ministry, the total urban housing shortage was 24.71 lakh as on 2007.
Seeking ways to deal with housing shortage, she said, "The housing deficit cannot be addressed only by government programmes. A strategy is required which converts the housing shortage into a market opportunity and mobilises private investments."
Lamenting that urban poor face financial exclusion, she said, "Financial institutions are reluctant to lend to the lower income segments in view of perceived credit risks, lack of credit history and difficulties in foreclosure of loans.
This outlook requires a change," the minister added.