SBI Mutual Fund has deferred its plan to launch a Shariah-compliant equity fund, which has run into a controversy amid opposition from religious bodies and targeted investors to the proposed structure of this scheme.
SBI MF, which had earlier plans to launch this scheme on December 1, is now reviewing the structure of the product.
Other MF houses which are already having Shariah- compliant MFs include Tata MF and Taurus MF. Such funds typically invest only in Shariah-complaint companies and businesses. They are generally prohibited from investing in companies engaged in businesses like alcohol, gambling and arms.
Though SBI MF did not offer any reason for deferring the plan, industry sources said this could be due to issues raised by the All-India Muslim Personal Law Board (AIMPLB).
No immediate comments could be obtained from AIMPLB.
When contacted, SBI MF Managing Director and CEO Dinesh Khara said market regulator Sebi is the only competent authority and it has given all the necessary approvals for the fund.
"When we went to investors to seek their view on the Shariah compliant equity fund, we got some inputs from them that was not encouraging as they had some issues with the current structure of the product. Therefore, we decided to review the final structure of the product," he told PTI.
As to when the company is likely to launch the product, he said, "review of the structure of the product will take some time which will be followed by approval by the Sebi and hence at the moment I'm not in a position to tell you how much time will it take for us to launch the product."
The investors have demanded tax incentive on investment in such funds on the lines of equity-linked savings scheme.
