RBI rules out giving permission to Albaraka Islamic Bank

Kochi: The Reserve Bank of India informed the Kerala High Court that it had not given permission to Albaraka financial service, an Islamic bank to run non banking institution as per Islamic banking rules sans interest. The documents which were submitted by the bank were incomplete and the application was rejected. RBI is of the stand that if the bank approaches again after clarifying all mistakes, it can give permission after checking its functional style. RBI also made it clear that they do not have the knowledge of on what basis the state government gave sanction to them. RBI also asked to exclude them from the list of opponents, as now the application by the bank is not before them.

The RBI made the clarification on a petition field Janatha party leader Subramanian Swami and RV Babu from Paravur against the functioning of Islamic bank which is based on Shariah law. The hearing on the petition would be continued on Wednesday before the division bench comprising chief justice J Chelameshwar, Justice PR Ramachandra Menon.

Albaraka director claimed that there is no legal objections agiainst running a non banking financial institution .






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