The bench comprised of chief justice J Chelameswar and justice PR Ramachandra Menon and they dismissed the petition which had been filed by Janata Party president Subramanian Swamy and others.

The petition was rejected as there was no valid reason supporting the claim that the new form of banking would actually be a step towards promoting a particular region.

The company, Al Barakh Financial Services has greeted the approval. "It is a very favourable development and the board of directors will meet to decide on the plan of action", Al Barakh director EM Najeeb said.

"The whole idea of the concept is to make use of funds without interest, directly or indirectly, for infrastructure projects in Kerala and reward the investors through profits", Najeeb said.