The Kerala High Court today adjourned a petition filed by Subramanian Swamy, a former Union minister, against the proposed commencement of an Islamic bank with state participation to January 5, for a detailed hearing.
Mr. Swamy had challenged the order of the principal secretary, industries, of the state government, allowing Kerala State Industrial Development Corporation (KSIDC) to register a company to provide banking services as enjoined in Muslim personal law. The government proposes to set up the first Islamic bank in India, with 13 per cent equity participation of KSIDC. The proposed bank will be registered as an NBFC, as the Banking Regulation Act does not provide for operating banks under the rules in question.
The order has been challenged on the grounds that such an institution would be against the basic principles of the country’s Constitution, that provides equal status to all religions. The petitioner says that starting a bank that follow sharia principles and under a sharia board will be a preferential treatment to one particular religion.
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