IslamicFinance.de

Investigation authorities are probing complaints that a Bengaluru-based company, which promised to route investors’ savings into halal investments, cheated them of 2000 crore. India does not recognise Islamic banking, but there are investment options for those who do not want to violate religious laws while investing their savings. Researcher Shafeeq Rahman says that Muslims have an unmet need for Shariah-compliant investments. Because they are more likely to run their own businesses, Muslims have more need for credit and go to groups that offer halal financial services. The problem is that these institutions use the claim of Shariah investments to lure depositors, but these groups are not regulated by government agencies.

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%.