The government issued a detailed directive on October 11, naming the scheme after noted educationist and former President Dr Zakir Husain.
It has also invited applications from eligible institutions for grants to improve basic infrastructure.
The madrasas need to be registered with the charity commissioner’s office and the state Wakf Board.
The state cabinet had approved the scheme in early September, following which the Hindu vedic and varkari schools, too, demanded similar financial aid.
The CM had showed his willingness to consider the demand from Hindu schools as well and has asked the administration to work on it.
In the cabinet meeting on October 9, supported by his Congress colleagues, minority welfare minister Arief Naseem Khan raised the issue and demanded the expedition of welfare schemes for Muslims in the pre-election year.
The government issued a directive within two days.
The decision is significant because Muslims account for 10.6% of the state’s population.