India's Bombay Stock Exchange has launched the BSE Tasis Sharia 50 index of the largest and most liquid Shariah-compliant stocks within its BSE500 index, which it aims to license for the construction of Shariah-compliant structured products and other financial products, including mutual funds and ETFs.
The companies in the index have been vetted to ensure they comply with Islamic law, which does not allow investors to put money into firms that benefit from interest or the sale of sinful goods such as alcohol, tobacco or firearms.
Chief executive of the Bombay Stock Exchange, Madhu Kannan, said the index would attract Islamic and other socially responsible investors both in India and overseas. "This index will create increased awareness of financial investments among the masses and help enhance financial inclusion," he said.
Companies included in the index have been screened by Taqwaa Advisory and Shariah Investment Solutions (Tasis), an Indian Islamic finance company based in Mumbai, whose board members include Islamic scholars and legal experts.
"Bombay Stock Exchange has the largest number of listed sharia-compliant stocks in the world," said Shariq Nisar, director of research and operations at Tasis.
"All Muslim countries of the Middle East and Pakistan put together do not have as many listed Sharia-compliant stocks as are available on the BSE."