Finance and faith in the National Capital Territory
Islamic finance in Delhi is the story of a capital that hosts national institutions but few interest-free lenders of its own: Muslims are about 12.86 per cent of residents in Census 2011, yet no Islamic bank is licensed anywhere in the country. Delhi is the National Capital Territory, and New Delhi is the national capital, housing the executive, legislative and judicial branches.
The capital’s importance lies in its offices rather than its branches. Organisations that serve Muslims nationwide, such as a zakat foundation and a society promoting interest-free microfinance, keep their headquarters or planned headquarters here, while ordinary lending to households is thinner. The sections below cover one cooperative branch, one state corporation and one national charity.
Readers should therefore separate three things that are easy to blur: national organisations that are only based in Delhi, local lenders that serve Delhi residents, and government channels that every eligible Delhi resident can use. The sections below take them in turn.
The Al-Khair branch at Jamia Nagar
Among the 13 branches of Al-Khair Co-operative Credit Society, one is in Delhi, at Jamia Nagar. The other twelve are spread across Bihar (8), Uttar Pradesh (2, in Lucknow) and Jharkhand (2, in Jamshedpur). The society is a multistate cooperative registered as MSCS/CR/136/2002 and headquartered in Patna.
Loans require membership, and an application must be submitted at a branch on the society’s own loan form. The society states plainly that it gives no loans online and never asks for documents or deposits over the internet. The society publishes its warning in English and Hindi, with official contact numbers 0612-2250434 and 9304774124 and an official email address.
A Delhi resident who receives an unsolicited call offering an Al-Khair loan should hang up and verify using those numbers. No list of scam tactics is needed, because a simple rule applies: a real branch never asks for an advance fee. Report suspected cybercrime to the National Cyber Crime Reporting Portal or helpline 1930.
Delhi’s state corporation for minorities and other groups
The government body is the Delhi SC/ST/OBC/Min. and Handicapped Finance and Development Corporation Limited, known as DSFDC. It was incorporated on 29 January 1983 under the Companies Act 1956, has an authorised capital of Rs 100 crore, and has its headquarters at Ambedkar Bhawan in Rohini, with three zonal offices.
DSFDC is the state channelising agency for five national corporations, including the National Minorities Development and Finance Corporation. The structure means that a Delhi resident from a notified minority may reach concessional central funds through this one corporation, along with people from other eligible groups. Ask the corporation for the minority scheme details and the interest rates.
Because the corporation serves several communities at once, an applicant should ask which national scheme fits, what documents prove community status and what the repayment terms are. These loans are conventional, so anyone avoiding interest has to discuss the question with a scholar before applying. Ask for every answer in writing and keep a copy with your application papers.
The Zakat Foundation of India in New Delhi
The Zakat Foundation of India is based in New Delhi. Its programmes include coaching for civil services and SSC examinations, scholarships, Hifzul Quran, tailoring institutes for girls, a National Waqf Academy, orphanages, medical aid, feeding programmes, disaster relief, an institute for imams and khateebs, a Haj fund and waqf programmes. It also lists local units in Bahraich, Bhopal, Kashmir, Ladakh, Lucknow and Telangana.
Ask the foundation whether it makes any interest-free loans, and request its founding year and its tax approvals such as 80G or 12A. A donor who wants a tax deduction must therefore ask for the approval number and a receipt that shows the charity’s details, since income-tax deductions apply only with a valid 80G approval.
For a Delhi family needing help with education, coaching is one of the clearest services listed. For a family needing a business loan, the foundation is not the right door. Zakat is given to eligible recipients, and Quran 9:60 names eight categories among them the poor, the needy and debtors, so it is not a credit product.
Sahulat and the idea of a national interest-free network
Sahulat Microfinance Society was described by Radiance Weekly as a national non-governmental organisation with headquarters planned in New Delhi. It was launched at a meeting at the India International Islamic Cultural Centre on 28 March, in a preparatory year given as 2010-11. The Delhi location of the launch is the reason it appears here.
The society was chaired by Sherif Ahmed Cadri of Kerala. The idea is credited to Professor K. A. Siddique Hassan of the Human Welfare Trust, who became President, with Arshad Ajmal as Vice-President. It aimed for at least 500 interest-free microfinance units within five years and was not yet registered at that time.
Ask Sahulat itself for its current status in Delhi before relying on it. It describes itself as a specialised organisation for the economic development of weaker sections. The practical point is that Delhi’s role was convening and planning, not lending, so a resident should not look for a Sahulat counter in the capital without confirming it first.
Waqf in Delhi and the Delhi Waqf Board
The Lok Sabha was told of 373 encroached waqf properties under the Delhi Waqf Board. Waqf is a permanent endowment whose income serves charity. A figure of 373 shows how much endowed property is under encroachment, though it does not say what share of the total that represents.
Communities that depend on waqf land, such as a mosque in a crowded locality, should keep their documents in order and consult a lawyer about registration. Ask the board whether it runs any lending scheme, since waqf income should not be presumed to be a loan fund.
Confirm with the Delhi registrar of cooperative societies before relying on any cooperative, including any Jamia cooperative bank. A claim about either needs documentary proof before anyone relies on it.
Lessons from Delhi’s failed interest-free companies
A study by the All India Council for Muslim Economic Upliftment lists two Delhi companies, Al Fahad Investment and Al Falah Finance and Investment Company, among those that collapsed. The study is old, and a depositor today should treat both names as a warning rather than as a guide to any present lender.
Religious vocabulary is easy to borrow, and a company can use it without being Islamic in substance. The Reserve Bank of India’s Sachet portal allows anyone to report unauthorised deposit-taking, and complaints against banks and non-banking finance companies go to the RBI Integrated Ombudsman Scheme. Securities offers can be reported through SEBI SCORES.
A sound test is simple. Ask who regulates the body, whether it has a registration number, when it last published audited accounts, and what exactly is charged on a loan. If any answer is evasive, walk away, regardless of the name on the signboard.
Islamic finance in Delhi: crowdfunding and practical steps for residents
Crowdfunding in Delhi works as it does elsewhere. Donation-based campaigns require a public charitable trust, a society or a Section 8 company, and any money coming from abroad falls under the Foreign Contribution (Regulation) Act. Reward-based campaigns can pre-sell products, and lending-based or equity-based models are not available as Islamic products in India.
For credit, keep Aadhaar, a Permanent Account Number, address proof, bank statements and photographs ready, and check your score from TransUnion CIBIL or another of the four credit information companies. Compare a DSFDC route with Pradhan Mantri Mudra Yojana, which gives collateral-free micro-enterprise loans through banks, non-banking finance companies and microfinance institutions.
Finally, ask a qualified scholar or Sharia adviser about any contract before signing. A private qard hasan, in which the borrower returns only the principal, remains the simplest interest-free arrangement, and writing it down protects both sides.