Gujarati Muslims welcome Sharia-based SBI mutual fund

Social and religious leadership of the community have reacted with approval about the development as objective of the new equity fund, they say, is to provide medium and long term capital gains by those Muslims who avoid investing in interest-based and other business activities not approved by Shariah, or the Islamic financial and business laws.

“We welcome it with open arms if the new mutual fund launched by SBI is based on principles of Shariah”, said Mufti Ahmed Devlavi, president of the Gujarat unit of the Board for Protection of Madrasas  and a member of the All India Muslim Personal Law Board (AIMPLB).

Devlavi said that AIMPLB had been demanding for long for a permission to set up an Islamic Bank in India but the government denied it on the ground that the demand was not in consistence with the policies of the Reserve Bank of India.

Welcoming the decision, social activist J S Bandukwala said that a large number of Muslims avoided investing in companies because they were not aware of which companies were doing what kind of business and whether it was in line with the business laws prescribed by Shariah. Shariah prevents investment in companies or projects associated with taking and giving of interest,  gambling, alcohol, pork and pornography.

Stating that the new initiative of SBI would bring into circulation a huge amount of money which was lying idle, social and political activist Zubair Gopalani said that it was a “revolutionary step” of SBI that would change the economic scenario of the country.

He said that SBI seemed to have been attracted to launch the new equity fund  because of  better performance of Shariah-compliant mutual fund activities run by some private players for the last several years and returns on these investments were higher than in non-Shariah mutual fund investment.

Mufti Imtiaz Malek of the Darul Qaza(Islamic Court), appreciating the effort of the SBI in this regard, said that it would help in economic integration of a large section of the Muslim community who kept themselves aloof from investing in equity market.

He said that  the new fund was quite okay as it was not interest based and customers were to share both the profit as well as losses.
The scheme will be advised by a Shariah Advisory Board to ensure adherence to Shariah law in the portfolios.