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Muslim panel denies approving SBI Sharia compliant Mutual Fund
Tuesday December 2, 2014 7:08 AM, Staff Reporter

The All India Muslim Personal Law Board (AIMPLB), the highest body of Muslims in India, Monday denied giving its approval for the Sharia compliant Mutual Fund to be launched by the State Bank of India, India's largest state owned bank.


"The SBI has not consulted anything with the All India Muslim Personal Law Board (AIMPLB) on its reported plan to launch the Sharia compliant Mutual Fund. It is responsible to say that the Muslim panel has approved it", Abdur Raheem Qureshi, Asst. General Secretary of the All India Muslim Personal Law Board (AIMPLB) said in a press statement.

"We only know that the State Bank of India has formed a 'Sharia Board' for its Islamic compliant Mutual Fund scheme, and has included Khalid Saifullah Rehmani as one of its members. But, it is wrong to say based on this that the board has approved the SBI scheme", he added.

Khalid Saifullah Rehmani is one of the senior members of the All India Muslim Personal Law Board (AIMPLB).

Abdur Raheem Qureshi also said that such 'approvals' do not come under the perview of the board.

The State Bank of India had announced last Wednesday that it was launching a Sharia compliant Mutual Fund so as to provide the Indian Muslims an opportunity for investment.

The scheme was supposed to be launched Monday on December 01. An official said last week that the bank was expecting to attract an initial 1 billion rupees ($16.4 million) to the fund.

A large section of India's Muslim population remains outside the banking system, partly because Islamic law known as Sharia prohibits interest. Shares of companies linked to alcohol, tobacco, gambling and casinos and financial institutions that earn interest would be excluded from the fund.

"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 all aspects of Sharia banking laws," Khara said.

The SBI, however, deferred the launch without citing any reason. The announcement in this regard is made November 30 on the SBI Mutual Fund website.

"Investors are hereby informed that it has been decided to defer the launch of the New Fund Offer of Sharia Equity Fund", said the brief public notice put up on the website of SBI Mutual Fund.

The notice is signed by Dinesh Khara, MD & CEO SBI Mutual Fund. It has no mention whatsoever of when will it be launched.

In May last year, the Bombay Stock Exchange had launched India's first Sharia index, which tracks the performance of Sharia-compliant companies. These companies have given a return of 46 percent, performing better than the 30-share BSE Sensex index which gave annualized return of 41 percent.

Global Islamic banking assets were estimated at around $1.8 trillion in 2013.

Demand for India to have some kind of non-interest based investment and banking system is being raised since last many years. The Indian government however did not show any interest in the system adopted by many leading economies in the world.

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