Collateral (al-Rahn)‎ as practiced by Muslim funds of North India

Abstract EN

The present study, aims at highlighting the issues related to collateral as practiced by the five leading representative Muslim Funds of Northern India, which is a densely Muslim populated area.

The study, in particular, examines the need for collateral, its composition, safety and costs involved, modus operandi, socio-economic impacts and its legal status in the context of India.

It must be noted here that despite the non-recognition of al-rahn under the Indian law, these Funds have done impressive works by providing interest free loans to the needy people.

As for their modus operandi, it has been argued that these Funds must follow the prescribed rules and regulations in order to fully expand in India’s current liberalized financial market.

This study also highlights the great potential of the expansion of these Funds in the area of equity and venture finance.