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Saturday, 10 April 2010

Kerala HC restrains Kerala govt from participating in Islamic Bank

The Kerala High Court issued an interim order restraining the state Government or any other instrumentalities of the Government from participating, financially or otherwise, in the functioning of a bank popularly known as Islamic Bank. The interim order was issued by a Division Bench, comprising Chief Justice J Chelameswar and Justice C N Ramachandran Nair.

The court made it clear that Al-Barak company could function on its own according to the law of the land after obtaining the necessary clearances.

The interim order was issued by the High Court while considering writ petitions filed by former Union Law Minister Dr Subramanian Swamy and R V Babu, State Secretary of the Hindu Aikya Vedi.They had challenged the Government Order directing the KSIDC to have 11 per cent equity participation in the bank by Al-Barak private company.

The Government order was challenged by writ petitioners on the grounds that it was against the basic tenets of secularism as enshrined in the constitution. So the petitioners raised that the functioning of the bank would be against the Reserve Bank of India (RBI) guidelines. The court also directed the Union Government and RBI to file counter affidavits in the case.

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