Saturday, September 16, 2006
Towards opening an Islamic Bank in India
12 March, 1997
Dear Mirza Saheb, As Salaamualaikum wa Rehmatullah
May I give you a précis of some idea of how to proceed with any financial project in India? Abu Dawood’s first choice of opening a full-fledged Islamic Bank would require lot of leg work, without any certainty of success. New Commercial Banks have been recently licenced, but the parties had first built up good stakes in India. Besides, any Muslim project is bound to be doubly handicapped, unless some sweeteners by way of investment interests are first offered. In the case of a Kuwaiti organization, since Kuwait does not have reciprocal banking protocols with any other country, it could come as an argument against granting banking facilities to any Kuwait Bank. Even, Citibank people when informed by Abu Dawood that KFH is interested in their own bank; had politely asked him to clear this with political authorities and that there is some sensitivity towards Muslim interests ( which, of course, is an open secret)
Still at the moment, one Muslim Minister, Mr. C. M. Ibrahim, from Bangalore, is the right hand man of Prime Minister Deve Gowda and I can approach him through a personal friend of mine, whom he visits here in Mumbai, whenever he passes through. For this I may either have a first meeting with him or then try to fix a second meeting with Abu Dawood. To clear my bonafide, it will make things convenient if Abu Dawood arranged to send me a letter as a friend of the Bank to discuss the specific matter with the Minister. This is, of course, without any commitments on either side.
The second level of activity, that even Citibank recommended, was to go into a Non-Banking financial limited liability company, and the preferred opening given by Government is in Mutual Fund field. KFH can join hand with some US or UK institution with strong Mutual Fund Management exposure and both can then open up here. The Mutual Fund operation needs 3 companies. 1. Trustees 2. Mutual Fund (the operating company) 3. The Assets Management Co. (The Assets Management Co. Needs expertise to run the portfolio). If you need more details, I will send you further literature.
I have gleaned from my talks with Abu Dawood, that he requires 3 things from his joint venture Indian counter part, 1. He should have sufficient means, like Tata, Birla and good reputation. 2. He should have political clout 3. He should be a committed Muslim. I have already short listed a few people like Sherwani’s from Allahabad, some others from Madras and Bangalore. (None of the present firms like Al Ameen, Barkat, Muslim Fund, who are engaged in Islamic financial services, according to me, are qualified.) I will start the process of contacting others, only when I get a firm go-ahead from you.
You had mentioned about your pending visa. If you find other proper, you may directly write or phone Mr. Inder Kumar Gujral whose address and phone details I write below:
Mr. I. K. Gujral, M.P. (Rajya Sabha), UNION MINISTER OF EXTERNAL AFFAIRS
4AB PURANA QILLA ROAD
NEW DELHI - 110011
#251
Dear Mirza Saheb, As Salaamualaikum wa Rehmatullah
May I give you a précis of some idea of how to proceed with any financial project in India? Abu Dawood’s first choice of opening a full-fledged Islamic Bank would require lot of leg work, without any certainty of success. New Commercial Banks have been recently licenced, but the parties had first built up good stakes in India. Besides, any Muslim project is bound to be doubly handicapped, unless some sweeteners by way of investment interests are first offered. In the case of a Kuwaiti organization, since Kuwait does not have reciprocal banking protocols with any other country, it could come as an argument against granting banking facilities to any Kuwait Bank. Even, Citibank people when informed by Abu Dawood that KFH is interested in their own bank; had politely asked him to clear this with political authorities and that there is some sensitivity towards Muslim interests ( which, of course, is an open secret)
Still at the moment, one Muslim Minister, Mr. C. M. Ibrahim, from Bangalore, is the right hand man of Prime Minister Deve Gowda and I can approach him through a personal friend of mine, whom he visits here in Mumbai, whenever he passes through. For this I may either have a first meeting with him or then try to fix a second meeting with Abu Dawood. To clear my bonafide, it will make things convenient if Abu Dawood arranged to send me a letter as a friend of the Bank to discuss the specific matter with the Minister. This is, of course, without any commitments on either side.
The second level of activity, that even Citibank recommended, was to go into a Non-Banking financial limited liability company, and the preferred opening given by Government is in Mutual Fund field. KFH can join hand with some US or UK institution with strong Mutual Fund Management exposure and both can then open up here. The Mutual Fund operation needs 3 companies. 1. Trustees 2. Mutual Fund (the operating company) 3. The Assets Management Co. (The Assets Management Co. Needs expertise to run the portfolio). If you need more details, I will send you further literature.
I have gleaned from my talks with Abu Dawood, that he requires 3 things from his joint venture Indian counter part, 1. He should have sufficient means, like Tata, Birla and good reputation. 2. He should have political clout 3. He should be a committed Muslim. I have already short listed a few people like Sherwani’s from Allahabad, some others from Madras and Bangalore. (None of the present firms like Al Ameen, Barkat, Muslim Fund, who are engaged in Islamic financial services, according to me, are qualified.) I will start the process of contacting others, only when I get a firm go-ahead from you.
You had mentioned about your pending visa. If you find other proper, you may directly write or phone Mr. Inder Kumar Gujral whose address and phone details I write below:
Mr. I. K. Gujral, M.P. (Rajya Sabha), UNION MINISTER OF EXTERNAL AFFAIRS
4AB PURANA QILLA ROAD
NEW DELHI - 110011
#251
