As we approach the fag end of the financial year, it is time now for the Union government to have a fresh look at its decision to defer a Shariah-compliant mutual fund that was to be issued by the State Bank of India (SBI).
The SBI had decided to launch it in December 2014 after due consultation with and permission from the Reserve Bank of India and the Union government.
At the last moment, the decision was deferred by the new government. As it was not cancelled right away, we have reason to hope that the government would have a fresh look at the decision.
We feel that the moment for allowing it has arrived. It will certainly help the inclusion of Muslims in the country’s financial system. Pious Muslims stay away from interest-based transactions as they feel this system is unethical and exploitative.
The inclusion of so many people in the financial system will only boost the national economy in the long run, which should be a legitimate reason for any government to allow it. Because it makes sound financial sense the world’s best banks have special windows for such transactions.
On enquiry, we found that the system is not comfortable with such products and instruments because of their nomenclature. Prefixes like ‘Islamic’ or ‘Shariah’ are said to cause reservations among decision makers on the issue.
We offer to have the mutual fund under any nomenclature like ‘Equitable’, ‘Ethical’, or any other such name. We hope that we will get a fresh opportunity to benefit from the SBI programme stalled before it could take off.
This is the right time for the government to review it.
(Dr Mohammad Manzoor Alam Chairman Institute of Objective Studies and General Secretary of All India Milli Council.)
Related:
Launch of SBI Sharia-compliant MFs deferred