MUMBAI/ INDIA: Indias premier state-owned bank the State Bank of India (SBI) had deferred plans to launch its plan to launch a Shariah Equity Fund, media reports say.
Shariah Equity Fund, was a planned open-ended scheme designed to invest money in companies that follow Islamic Shariah that was promoted by SBI Mutual Fund the mutual fund arm of the SBI.
The shelving of the plan to launch the Shariah Equity Fund has led to speculation in a section of the market that it could be a political move.
The move rocked Indias parliament with members alleging that the decision to shelve the plan was taken last December, and was on account of “an important functionary” writing to Prime Minister Narendra Modi opposing the proposed equity fund.
Former Minority Affairs Minister K Rahman Khan alleged the deferment to which reason was given, happened even after the Reserve Bank of India was convinced about the feasibility of such a scheme, which could bring Rs 50,000 crore of deposits.
“Do not look at economic issues also from the coloured glasses. Funds could come from Mauritius but not from other states,” Khan said, who had been a strong votary of Islamic banking.
Earlier the Indian Express quoted an SBI official: “We had a plan but it was deferred – it was a commercial call. The plan is to be re-examined but it has not been done yet.
The proposed fund was to invest in stocks that are part of an index, which comprises shares that are compliant with Shariah laws. Instead of paying interest, the scheme was to pay dividend.
The scheme had received all the approvals from market regulator Sebi, and was slated for launch on December 1.
Investments based on Shariah rules have been getting popular in India. However, Islamic banking is yet to be allowed in the country as the banking regulator Reserve Bank of India has found it inconsistent with the existing laws.
Follow this link to join our WhatsApp group: Join Now
Be Part of Quality Journalism |
Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast. |
ACT NOW |
MONTHLY | Rs 100 | |
YEARLY | Rs 1000 | |
LIFETIME | Rs 10000 | |