Reserve Bank of India in a reply to RTI application has informed that no steps have been taken for the introduction of Sharia-compliant mutual funds in India.
RBI said the Government of India had sought its comments on the launch of Sharia-compliant mutual funds by State Bank of India. The RBI submitted its reply the same month, it said.
The Islamic or Sharia-compliant financial system is based on the principles of not charging an interest on deposits, as it is prohibited under Islam.
“The Reserve Bank of India has not taken any step for introduction of Sharia-compliant mutual funds in India,” the reply said.
The State Bank of India in 2014 had announced the launch of the same. However, it was deferred to make it a better and more attractive fund in the future, according to an official intimation.
H Abdur Raqeeb, General Secretary, Indian Centre for Islamic Finance – an NGO trying to introduce members of the Muslim community to the Sharia-compliant banking system, said the initiation of such special mutual funds for a select group of people would be a much-desired and welcome step.
“It is a misconception that Sharia-compliant mutual funds are beneficial to a particular community. These funds will benefit the economy and ensure financial inclusion of those who avoid such investment for religious reasons,” he said.
Raqeeb has been coordinating with various government and regulatory authorities for the introduction of the Sharia- complaint banking system in India.
“When the launch of Sharia mutual fund was announced by SBI, some of the gulf countries were very enthusiastic for investment. It is high time the RBI and the finance ministry instructed SBI to relaunch the same,” he said.
SBI had rejected an RTI application seeking details on the relaunch of Sharia-compliant mutual funds , saying the “query is vague and not specific”.