Sharia Index

The BSE and Mumbai-based Taqwaa Advisory and Shariah Investment Solutions (Tasis) has launched India's first equity index of companies that comply with Sharia, the Islamic law.

Pritam P. Hans        Print Edition: February 2011

The BSE and Mumbai-based Taqwaa Advisory and Shariah Investment Solutions (Tasis) has launched India's first equity index of companies that comply with Sharia, the Islamic law. It is an attempt to increase participation of Muslims in the equity market and attract investment from international funds that adhere to Islamic law.

The BSE Tasis Shariah 50 consists of some of the leading companies, including TCS, Reliance Industries, ONGC and Bharti Airtel. Islamic laws do not permit investment in companies that benefit from interest income or sale of alcohol, tobacco and weapons.

Islamic finance has continued to grow despite a loss of confidence in global financial systems. Sharia-compliant assets rose by 8.85% from $822 billion in 2009 to $895 billion in 2010, according to a survey of Islamic finance institutions by The Banker. It has grown at a compounded annual growth rate of 23.46% from 2006 to 2010.

"The introduction of the BSE Tasis Shariah 50 Index will help attract pools of capital from the Gulf, Europe and South-East Asia. It will also build a base for licensing and construction of Shariahcompliant financial products, including mutual funds," says Madhu Kannan, MD & CEO, BSE.

According to the 2001 Census, India has around 14 crore Muslims, almost 13.5% of the total population. Despite this, their participation in the financial system is minimal. Half of the Indian Muslim population is not part of the formal financial system, according to the Sachar Committee Report (2006).

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