A Review of the History and Existing Practices of the Shari’a Screening

Rizwan Malik ()
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Rizwan Malik: Bahrain Institute of Banking and Finance

Chapter Chapter 5 in Shari'a Compliant Equity Investments, 2024, pp 121-192 from Springer

Abstract: Abstract This chapter delves into the historical development and current practices of Shari’a-compliant equity screening methodologies. By analysing interviews with Shari’a scholars and industry experts, the chapter sheds light on the motivations behind the creation of these methodologies and how they have evolved. Key themes explored include the impact of fatwas on Islamic investment practices, the challenges of screening companies involved in mixed activities, and the rationale behind the use of specific thresholds for financial ratios. The chapter also examines the ongoing debate about incorporating socially responsible investment (SRI) principles into Shari’a screening and explores potential future enhancements to these methodologies in the light of developments within the Islamic finance industry (IBF). This in-depth analysis provides valuable insights for researchers and practitioners interested in understanding the complexities of Shari’a-compliant equity screening. It paves the way for further discussion and innovation in this dynamic field.

Keywords: Shari’a-compliant screening; Islamic finance; Fatwa; Dow Jones Islamic Market Index (DJIMI); Mixed businesses; Thresholds; Purification; Socially responsible investments (SRI) (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-70822-0_5

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DOI: 10.1007/978-3-031-70822-0_5

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