State Bank of India will launch an Islamic equity fund in December. The Securities and Exchange Board of India had recently allowed the bank and three mutual funds to launch Sharia compliant funds. An official of the bank said it is expecting to raise around Rs 100 crore initially. The stock exchanges in the country have around 700 companies that are Sharia-compliant. India becomes the second country outside the Islamic world where a state-owned bank is offering a Sharia-compliant fund. The UK issued sovereign Islamic bonds recently. The SBI Shariah Equity Fund will be open for the public to subscribe on 1 December offering medium to long term capital gains equity and equity related instruments. The issue will close on 15 December and again reopen on or before 26 December. The minimum application amount is Rs 5,000 and in multiples of Re 1 thereafter with additional purchase of Rs 1,000 and in multiples of Re 1. The scheme will be benchmarked against the Standard and Poor’s BSE 500 Shariah Index that that avoids exposure to business activities related to pork, alcohol, gambling, financials, pornography, tobacco and speculative trading.
