The country is likely to get its first Islamic mutual fund soon as a Delhi-based asset management company Taurus has approached capital market regulator SEBI to launch such a product based on the Sharia laws.
"Subject to approval from SEBI, we expect to mop up Rs 500 crore from Taurus Parasoli Ethical Fund," Taurus Mutual Fund Managing Director RK Gupta told PTI in New Delhi.
Detailing the features of the five-year close-ended fund, Gupta said it would invest in stocks that are shariat -compliant, or in simple terms do not relate to the businesses like liquor, banned by the Islamic laws.
He claimed that 71 stock in BSE 100 and 366 stocks in BSE 500 are Shariat-compliant.
Gupta said the product is likely to attract more non-Muslims than Muslims since the concept is quite business-like.
Since interest income is banned under Shariat laws, Taurus would give quarterly disclosure of income to subscribers, breaking them up into interest income and capital appreciation.
Those who do not want interest income can donate it to Zakat, which is an obligation on Muslims to pay part of their income to specified charities to uplift poor, the destitute and so on.
This break-up would also enable the subscribers to know for better the operating income of companies in the underlying stocks other than the interest income and they would be in a more comfortable position to make judgements about the stocks, Gupta said.