IslamicFinance.de

The decision of State Bank of India (SBI) to put off the launch of a Shariah-compliant equity mutual fund has once again sparked debates on whether India should open doors to the concept of Islamic finance and facilitate a market for Shariah compliant financial products. The fund was designed to invest in Shariah compliant companies. Dinesh Kumar Khara, managing director and CEO of SBI Mutual Fund, said that SBI’s decision to defer the fund launch, originally planned in December, was a commercial call. On the other hand, Congress' member K Rahman Khan said in Parliament that the decision was due to political intervention.

The State Bank of India (SBI) will launch a Shariah-compliant mutual fund next month, the first time a state-owned bank will roll out an Islamic financial instrument for the country’s estimated 170-million Muslim population. An SBI official said the country’s biggest lender had received all clearances to launch its Shariah Equity Fund, including from the Reserve Bank of India and the government. The All India Muslim Personal Law Board (AIMPLB), the country’s apex body on Shariah law, lent its support to the move. The Bombay Stock Exchange launched India’s first Shariah index — S&P BSE 500 Shariah — in May 2013. Over the past year, it has given a return of a robust 46%.