Islamic Banking: Greener pastures open in banking sector

Kozhikode: The Muslim education institutions in Malabar have taken a cue from the state government in their interest towards Islamic banking.

While state government is expecting more funds to come to the state through the new banking system, the educational institutions here are gearing up to offer specialized courses anticipating a huge manpower requirement.

Though the RBI nod to start operations for the Islamic finance company Al Baraka Financial Services, promoted by state government's Kerala State Industries Development Corporation, is awaited, the job market is abuzz with the enormous job potential it is likely to offer.

Islamic banking is an interest-free banking system operated in accordance with Sharia laws that prohibits taking or giving interest.

Under the system, banks do not pay interests on deposits nor do they charge interest on loans. The money deposited is used to finance projects on ownership basis.

The fact that many graduates in the state have got lucrative job offers at MNCs in west Asia in companies offering Shariah-compliant mutual funds and venture capital funds has increased the lure for the courses.

"We have seen a growing interest for our postgraduate diploma in Islamic economics and finance (PGDIEF) course. Currently we offer 40 seats a year but the number of applicants last year was nearly 200," said Mohammed Pallath, chief coordinator of the course at Al Jamia Al Islamiya, a religious college, at Santhapuram.

The institution also offers diploma courses of IGNOU in Islamic banking, Islamic finance and Islamic insurance.

Shoukath Ali, a faculty member teaching Islamic finance at the institution, said that requirement for qualified professionals in Islamic finance will see a big rise once the non-banking financial companies (NBFCs) like Al-Baraka and other projects take off.

He said that by adopting Islamic banking the state can channel billions of rupees needed for development activities.

There are many other institutions in Malappuram and Kozhikode which offer similar courses. The Elijah Institute of Management Studies in Thrissur has recently started offering a postgraduate diploma course in Islamic banking and management as an add-on course for their MBA students.