29 NOVEMBER 2014 New Delhi – One of the largely Populated country where its one third of the Population are Muslims and banking are all conventional could not attract for those hardliner to the banking process which has recently realized by the Indian government and agreed to operate an Islamic shariah compliant fund system by its government owned bank.
India’s largest state-owned bank will launch an Islamic equity fund next month aimed mainly at attracting investments from the country’s 170 million Muslims. The Securities and Exchange Board of India, the country’s capital markets regulator, recently allowed the government-owned State Bank of India and three mutual funds to launch Shariah funds.
An official said on Wednesday that the bank is expecting to attract an initial Rs. 1 billion ($16.4 million) to the fund which will be launched on December 1.
“It will be a diversified equity fund, including large cap, mid cap and small cap funds,” said Dinesh Khara, managing director and CEO of the bank’s SBI Mutual Fund. “We will identify stocks that meet the Bombay Stock Exchange Shariah filter.”
In May last year, the Bombay Stock Exchange launched India’s first Shariah index, which tracks the performance of Shariah-compliant companies. These companies have given a return of 46 per cent, performing better than the 30-share BSE Sensex index which gave annual return of 41 per cent.
Global Islamic banking assets were estimated at around $1.8 trillion in 2013.
Source: Associated Press