New Delhi:
The International conference on "Prospects for Islamic Venture
Capital Funds in India" concluded here on Sunday with an appeal to
the Government of India to take necessary steps to allow various
financial institutions to adopt Islamic products and practices so
as to lay foundations of a level playing field in economics and
finance in which all players may take part in a fair and just
manner.
The two-day International conference was jointly organized by the
Institute of Objective Studies, (IOS), New Delhi and Indo-Arab
Economic Cooperation Forum, in Parliament House Annexe on May 14 &
15 May. Dr. Rudy Yaksick, Partner, Concord Capital Partners LLC,
from USA and Khaled M. Al-Aboodi, CEO & General Manager of Islamic
Corporation for the Development of the Private Sector (ICD),
Jeddah; Mr. Nabil El-Alami, Corporate Marketing & Communication
Manager, ICD, Jeddah, KSA were among the foreign participants in
the conference.
The above appeal was part of the nine-point resolution which was
adopted by voice vote at the valedictory function of the
conference. The function was chaired by Dr. Mohammad Manzoor Alam,
Chairman IOS while the valedictory address was delivered by Mr. G.
Ramaswamy, President Institute of Chartered Accountants of India,
(ICAI), New Delhi. Prof. Naushad Ali Azad, former Dean of Social
Sciences, Jamia Millia Islamia, New Delhi read out the
resolutions. During the two-day deliberations, a number of Islamic
financial experts and academics from India and abroad highlighted
the finer points of the Islamic system and its utility and
viability. Dr. Tahir Beg, convener of the conference, proposed
vote of thanks.
The other resolutions adopted at the conference were as follows:-
(i) This conference noted with
satisfaction the current progress of Islamic banking in theory and
practice. It was gratified to note that many countries in Western
hemisphere have taken necessary steps in this connection. to allow
various financial institutions to adopt Islamic product and
practices. However, it hoped that Islamic finance would be able to
deliver the goods in India too;
(ii) The conference appealed to the
community institutions and community leaders to nurture and
develop the entrepreneurial traditions;
(iii) The conference resolved that
government of India should take necessary steps to liberalize the
conditions for the establishment of Venture capital funds,
lowering the required threshold limits for them. The conference
hoped that such a step would lead to establishment of such funds
and provide more funds for small and micro enterprises;
(iv) The conference appealed to the
regulators, business corporations, investors and all others
concerned to make use of venture capital funds. The conference
underscored the role of venture capital funds to provide for the
financial needs of new firms which have a vital role in promoting
productive capacity, investment, income, employment and
entrepreneurship in the economy. The promotion of Islamic venture
capital funds may attract more investment to this country and may
direct investment towards desired directions;
(v) The conference requested the
government of India to direct financial regulators such as RBI,
SEBI. IRDA, NABARD etc to establish a special fund to promote
financial literacy in the country, particularly in the rural areas
and for the benefit of economically weaker sections of Indian
population including the scheduled castes, scheduled tribes and
minorities;
(vi) The conference welcomed the
initiative of establishing incubation centers at some national
educational institutions. However, the conference reiterated the
role of minority institutions in this regard and demanded the
government that such institutions like Aligarh Muslim University,
the Jamia Millia Islamia of New Delhi and the Jamia Hamdard be
given priority in establishing such centers and in giving
financial, technical and other support to them;
(vii) The conference suggested that
institutions like Waqf Boards, Hajj Committee of India, and
Minority Finance Corporations etc may be allowed to invest their
surplus funds in the development of Indian economy in such a
manner that does not contravene the religious sensibilities and
(viii) The conference also suggested
that venture capital and mutual funds must refrain from investing
in such instruments that yield interest income. However, these
financial institutions must be encouraged to invest in the
equities of government owned companies. These institutions may
also be allowed to raise interest free deposits from the general
public.
Meanwhile, Ramaswamy, in his valedictory address said that it has
been recognized that China and India are fastest growing economies
in the world. With fast growing economy the prospects of
investment with innovation in India has increased manifold. As
such India needs to focus on the Islamic Venture Capital Fund, (IVCF),
as it has huge potential to boost the economic growth further.
This is possible only through education which would give a fillip
to innovation, he emphasized.
He said that Islamic finance is a reality for which a separate set
up is required. It is an eye opener for ICAI which gives new
thought and idea in the field of financing. It is very important
for entrepreneurs in India. The IVCF can be channelized by
innovating and research. “In this competitive era you have to
innovate or perish”, he remarked.
While assuring full cooperation to IOS from his ICAI, Ramaswamy
called for joint efforts to present specific proposals of Islamic
finance to the Government of India in order to get its approval.
While Dr. Mohammad Manzoor Alam, IOS chairman, in his presidential
speech said that India has largest number of youth in the age
group of 15-35 years which is about 60 per cent. It is a good
omen. He called upon the youth who were present on the occasion in
good numbers to take a lead in Islamic finance for the benefit of
the Muslim Ummah and the country at large. He said that IVCF is a
viable option to interest-based banking system and is not for
Muslims alone but for the whole humanity which is groaning under
the conventional banking system.
Dr. Manzoor emphatically said that his commitment is to see that
in a global changing scenario Islamic banking system saves
humanity from exploitations. He said that IOS would play its
important role and try to implement the suggestions made in the
conference. He announced to hold a workshop on Islamic finance
wherein experts in the field would be invited. Thereafter, a
consultative committee will be constituted to study in depth
Islamic finance and IVCF along with Reserve Bank of India
regulations and come up with suggestions, he declared.
Meanwhile, before the valedictory function two sessions of panel
discussion were held on the second day. The theme of the third
panel discussion was "Venture Capital Funds in Islamic Perspective
(II)". It was chaired by Mr. M. H. Khatkhatay, Founder, TASIS,
Mumbai. The panelists were Dr. Rudy Yaksick, Partner, Concord
Capital Partners LLC, USA; Mr. Imtaiyaz-ur-Rahman, President and
Chief Financial Officer, UTI Asset Management Co. Pvt. Ltd.,
Mumbai; Mr. Faiyaz Ahmad Lone, Research scholar in Department of
Commerce at Aligarh Muslim University; and Mr. Shadab Mobin,
former Consultant, National Entrepreneurship Network, New Delhi.
While the fourth panel discussion was on the theme of "Prospects
for Islamic Venture Capital Funds in India". Mr.
Imtaiyaz-ur-Rahman, President and Chief Financial Officer, UTI
Asset Management Co. Pvt. Ltd., Mumbai, chaired the discussion.
The panelists were Dr. Tahir Beg, Chairman, Institute of Islamic
Economics & Development Studies, Bareilly; Dr. Shariq Nisar,
Director (Research and Operations), TASIS, Bangalore; and Dr. A.
Mohammed Ajmal, CEO Wealthcity, Chennai.
In all 17 personalities which included intellectuals, experts and
journalists were felicitated with IOS awards during the two-day
conference. Those who were honoured included: Mr. Nabil El-Alami,
Corporate Marketing & Communication Manager, ICD, Jeddah, KSA; Mr.
D. R. Mehta, former Chairman, SEBI and Dy. Chairman, RBI, Jaipur;
Adv. Pravin H. Parekh, president Supreme Court Bar Association of
India, Dr. Ashok Haldia, Director, PTC India Ltd., Dr. Tahir Beg,
Chairman, Institute of Islamic Economics & Development Studies,
Bareilly; Dr. Ausaf Ahmad, Former Head, Special Assignment, IDB,
Jeddah, & Finance Secretary, IOS; Mr. G. Ramaswamy, President
Institute of Chartered Accountants of India, (ICAI), New Delhi;
Educationist Mr. Syed Hamid, Chancellor Hamdard University, New
Delhi; Mr. Ravi Kishore, Secretary General, Indo-Arab Economic
Cooperation Forum, New Delhi; Prof. Rifaquat Ali, former Professor
of History, Jamia Millia, New Delhi, senior journalist Zia-ul-Huq
etc.
It may be stated here that at the inaugural function of the
International conference Khaled M. Al-Aboodi, CEO & General
Manager of Islamic Corporation for the Development of the Private
Sector (ICD), Jeddah had said: “In order to create a comprehensive
and robust financial system, Islamic financial institutions need
to be innovative and focus on developing Venture Capital, (VC)
private equity and alternative investments. This will create an
industry with a niche that is capable of competing with
conventional banks, with the added value of shared wealth for the
society. It is hoped that Islamic VCs will play a major role in
developing Muslim countries”.
Al-Aboodi said the beauty of Islamic Finance is that it is a
constitutionally developing and evolving industry, with new and
innovative financial instruments and hybrid products being
developed to fit particular business models, industries and
countries, creating an edge over conventional products.
Mr. K. Rahman Khan, Deputy Chairman, Rajya Sabha who chaired the
inaugural session in his presidential speech, while emphasizing
the advantages of Islamic banking, said that it has originated
from the Holy Qur’an which is not religious book of Muslims alone
but for the whole humanity as it is a book of guidance for one and
all.
Mr. Khan said that in every economic transaction four things
should be kept in mind viz. (i) justice, (ii) equilibrium, (iii)
truth and (iv) fairness. Any transactions which complies with
these four principles as enunciated by the Holy Qur’an then it
will ensure well being, peace and harmony among the people which
is the hallmark of a good society. The Holy Qur’an has stated that
none should be exploited and Islamic banking takes care of this.
However, the conventional banking system fails to grow and assist
the poor who are thus exploited at the cost of the rich people in
society, he added.
Mr. D. R. Mehta, former Chairman, SEBI and Dy. Chairman, RBI,
Jaipur, while delivering inaugural address said that if India has
to progress then Islamic Venture Capital Funds, (IVCFs), has to be
launched in the country as Malaysia and other countries are
successfully experimenting with it. India is a multi-religious
country and the prospects and the prospects for IVCFs in the
country are very bright and as such it should be developed for
different sections of society, he added.
(pervezbari@eth.net)
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