SBI To Start Islamic Equity Fund

The State Bank of India is going to launch an Islamic equity fund in December, which aims to target about 17 crore Muslims. The Securities and Exchange Board of India (SEBI) had recently given its go-ahead to SBI and three mutual funds to launch Sharia funds.

According to a report, SBI expects to raise about Rs 100 crore in the initial stage.

Charging or paying interest is not allowed under the Islamic Sharia law. India is the second non-Islamic country, where a state-owned bank will be offering a Sharia fund.

“Sharia prohibits acceptance of specific interest or fees for loans of money (known as riba, or usury), whether the payment is fixed or floating. Investment in businesses that provide goods or services considered contrary to Islamic principles (e.g. pork or alcohol) is also haraam ("sinful and prohibited").” [Source: Wikipedia]