The interest-free deposit scheme mooted by the Kerala Government is an extension of the Sharia-based banking principles, according to a top State Government official.
“The principles are the very same,” Mr T. Balakrishnan, Additional Chief Secretary and Secretary-Industries, Kerala, told Business Line here.
“It is merely that we have desisted from use of the word Sharia for fear of ruffling feathers in some circles which have expressed reservations about the State Government identifying itself with a particular religion or ideology in this manner.”
Interest-free treasury deposit scheme is eminently advisable for a State Government, which stands to immediately benefit from the beneficial implications for interest payments.
This would for sure have beneficial rub-off impact on the State Government finances here as well, Mr Balakrishnan said.
UNIQUE POSITION
“Kerala is in a unique position in the sense that it is among the very few which have a banking treasury with deposit-taking facility,” he added.
So there already is a technology infrastructure available to roll out the scheme seamlessly, something not every State can boast.
Asked about the proposed non-banking financial company based on Sharia principles being floated with Government participation, Mr Balakrishnan said it is a work in progress.
WIDENED SCOPE
“In fact we have widened the scope of the work, thanks to the Government seeking to get directly involved by launching the interest-free deposit scheme.
“We are in the process of implementing the Sharia banking principles into practice,” Mr Balakrishnan said.