There have been many demands in India, of Sharee’ah based banking organizations or at least products. Among the 175 million┬áMuslims in India, many have been anticipating Sharee’ah based financing in the country and have been inquiring about the same at various places. I think they have a good news. A Sharee’ah based product is about to hit the market very soon. It is an Islamic equity fund being launched by SBI Funds Management.

Islamic Product - Indian Market
Man Looking at Indices

The aim is to tap the large, untapped market that has a significant amount of demand for such products. There are no proper sharee’ah based debt alternatives in India. This product could give the equity market a boost, being launched by the 6th largest fund house in the country. Unlike other products, due to its unfamiliarity, the firm has not set a target on the number of expected subscribers, but have high expectations that the subscriptions will raise over time.

If there is demand, other sharee’ah based products will also be launched by them. SBI Funds Management will offer such products with support from Tata, Taurus and Goldman Sachs.

After the approval of the RBI to start a sharee’ah based organization in Kerala, but little or no progress, this product could encourage the Islamic Banking practice in the country. A full-fledged Islamic Banking system needs to be in place so that these products succeed as they should, but we could consider this just a beginning.