Finance Minister T.M. Thomas Isaac has said that regulations in the banking sector require changes so as to explore new avenues in financing major projects.
He was inaugurating a seminar on Islamic banking, organised by the Kerala Chamber of Commerce and Industry, here on Saturday.
The Minister said Kerala was on a forward leap in terms of income and the State needed large amounts to fund its infrastructure projects, including roads and bridges. Ceiling on loans that could be drawn by the government posed problems in taking up several projects. It was in this background that the government intended to promote alternative finance sources.
He urged all political parties to discuss options such as Islamic banking to finance infrastructure projects.
Though there were hindrances to utilising Islamic banking channels under the existing regulations, innovative ways could be found out to make use of the money available from such sources. Venture capital fund mode and special equity funding patterns could be adopted, he said.
The Minister said conventional approaches in the financial sector were undergoing changes and the Central government was expected to respond positively to new funding resources in due course of time. There was a heavy flow of funds under the Islamic banking pattern to western countries such as the U.S. Kerala, having close links with the Arab world, would benefit from Islamic banking once the hindrances were cleared at the national level, he added.
K.K. Ali, Chief Executive Officer, Alternate Investment and Credits Limited; Sherif Ahamed Cadri, Chief Executive Officer, Al-Baraka Financial Services Limited; K.S. Mohan, Additional General Manager, Federal Bank; Deepak L. Aswani, Chairman, KCCI; and K. Babumon, chairman, Kerala Chamber Youth Forum; spoke.
