Authors
Sabloo Thomas has worked as a special correspondent with the Deccan Chronicle from 2011 to December 2019. Post-Deccan Chronicle, he freelanced for various websites and worked in the capacity of a translator as well (English to Malayalam and Malayalam to English). He’s also worked with the New Indian Express as a reporter, senior reporter, and principal correspondent. He joined Express in 2001.
Pankaj Menon
Claim: Malappuram SBI accepts deposits under Sharia law.
Fact: Shariah Compliant Mutual Funds have been implemented nationwide.
Several social media users are claiming that the SBI branch has started accepting investments in Malappuram under the Sharia law. The posts are being shared with an image of showing a notice on the door of SBI Malappuram Civil Station Branch announcing that the bank accepted Sharia compliant deposits. The poster has the contact information of the branch manager and an executive. Sharing the post on X, user @Ar65474132 wrote, “What is this @TheOfficialSBI, Are you in a Islamic country? This board of Sharia complaint is from Malappuram Civil Station branch in Kerala.”
The archived version of the tweet can be seen here.
Many other users also shared similar claims on Twitter. The archived version of the tweets can be seen here, here, here and here.
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Fact Check/Verification
The claim that SBI had come up with an investment plan for just one district raised our doubts, following which we conducted a keyword search on Shariah-compliant investments. Newschecker came across guidelines for the Sharia compliant mutual funds on the website of regulatory body SEBI and Association of Mutual Funds in India.
We could thus understand that the mutual funds are run in accordance with the Sharia law and approved by the Sharia Board. The guidelines listed in the SEBI website says that the investments would be made only in stocks that comply with Sharia principles.
Key Principles of Sharia Compliant Deposits
We then examined the features of Shariah investments given on the ‘Good Finance’ website.
The key principles of Shariah compliant investment listed out by the website is given below:
1. Prohibition of Riba (interest or cost of capital)
Riba is the Islamic term for interest which is prohibited in Shariah Compliant Investing. This is a fundamental principle of the investment practice and in basic terms means that Muslims are encouraged to avoid any kind of investment deals that involve paying or receiving interest as part of the financial terms.
2. Avoidance of Haram
Haram is an Arabic term in Islam that describes anything that is ‘forbidden, inviolable or sacred’ according to Shariah Law. In relation to social investment, this specifically refers to interest-bearing financial agreements, but could also cover any loans/investments into sectors that cover forbidden activities, including gambling, alcohol, weaponry and some meat-based trading.
According to a report published in the Economic Times on November 26, 2014, SBI launched Sharia-compliant mutual fund investments on December 1, 2014.
We then reached out to the bank executive Sanjith Babu, whose number was listed on the poster pasted on the door of SBI Malappuram Civil Station Branch.
While the executive claimed that he has now been transferred from the Civil Station branch to the Kottakal branch, he clarified that SBI has implemented the Sharia Compliant mutual fund investment all across the country and is not specific to Malappuram. “These are mutual funds that do not invest in shares of businesses that are prohibited by Islamic faith,” he clarified.
Conclusion
Our investigation revealed that Sharia compliant Mutual Funds were implemented nationwide by SBI and not only in Malappuram.
Result: Missing Context
Sources
Guidelines of SBI Shariah-compliant mutual fund published on SEBI Website
Guidelines of SBI Shariah-compliant mutual fund published on the Association of Mutual Funds in India website
Feature of Shariah-compliant mutual fund published on Good Finance website
Report by Economic Times on November 26, 2014
Telephone conversation with SBI Executive Sanjith Babu
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Authors
Sabloo Thomas has worked as a special correspondent with the Deccan Chronicle from 2011 to December 2019. Post-Deccan Chronicle, he freelanced for various websites and worked in the capacity of a translator as well (English to Malayalam and Malayalam to English). He’s also worked with the New Indian Express as a reporter, senior reporter, and principal correspondent. He joined Express in 2001.
