Transparency about our screening methodology, certification status, data sources, and the limitations of automated Shariah screening.
Last Updated: 1 April 2026Barakfi's screening methodology is currently pending formal review and certification by an independent Shariah advisory board. Our screening criteria are derived from globally recognised standards (detailed below), but have not yet been formally endorsed by a Shariah scholar or board.
We are actively pursuing formal Shariah board certification and intend to engage a qualified panel of Islamic finance scholars with expertise in Indian equity markets. Until such certification is obtained, our screening results should be treated as preliminary assessments that require independent verification by users with their preferred Shariah authority.
Important: The absence of formal Shariah board certification means that our screening results do not carry the authority of a fatwa or certified Shariah opinion. Users must exercise their own judgment and consult qualified scholars.
Our screening methodology draws from three primary sources, combining global best practices with India-specific considerations:
The primary framework for our financial ratio screening. Developed by S&P Dow Jones Indices in consultation with Ratings Intelligence Partners, this is one of the most widely adopted Shariah equity screening standards globally.
The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) provides comprehensive Shariah standards referenced for sector classification and purification guidance.
The Indian Centre for Islamic Finance provides contextual guidance on applying international Islamic finance standards to the Indian equity market, including treatment of Indian-specific financial instruments.
We continuously monitor updates to these standards and adjust our screening rules accordingly. Any material changes to the methodology are documented and versioned.
Every stock in our universe undergoes a two-stage screening process: sector-level filtering followed by financial ratio analysis. The following criteria must be satisfied for a stock to be classified as compliant:
Total interest-bearing debt must be less than 33% of both the company's 36-month average market capitalisation and current market cap. This limits exposure to riba (interest-based leverage).
Revenue from non-permissible activities (alcohol, gambling, tobacco, pork, etc.) must not exceed 5% of total business income. This ensures the company's core business is halal.
Interest income earned from treasury operations, fixed deposits, or other interest-bearing instruments must be less than 5% of total business income.
Accounts receivable must be less than 33% of market capitalisation (S&P standard). This prevents investing in companies whose value is primarily tied up in receivables, which may represent interest-based transactions.
Cash and interest-bearing securities (including short-term investments) must be less than 33% of total assets (AAOIFI standard). This limits exposure to companies heavily invested in interest-bearing instruments.
The company must not operate primarily in a prohibited sector: conventional banking/finance, conventional insurance, alcohol, tobacco, pork, gambling, adult entertainment, cannabis, interest-based lending, or controversial weapons.
Each stock is assigned one of three compliance statuses based on the screening results:
The stock passes both the sector screen and all financial ratio thresholds. Based on available data and our automated methodology, the stock appears suitable for Shariah-compliant investment. This is not a religious certification — users should verify with their scholar.
The stock passes automated checks but carries flags that require human judgment: borderline ratios (within 5% of a threshold), mixed business activities, data gaps in financial statements, or recent corporate actions that may affect compliance. A qualified scholar's review is recommended.
The stock fails one or more screening criteria — either it operates in a prohibited sector or one or more financial ratios exceed the permissible threshold. This stock is not suitable for Shariah-compliant investment based on our methodology.
While automated screening provides consistency and scalability, it has inherent limitations that users should be aware of:
We are committed to obtaining formal Shariah advisory board certification for our screening methodology. Our roadmap includes:
Users will be notified when formal certification is obtained. The certification status on this page will be updated accordingly.
We encourage users to report any screening results they believe to be inaccurate or any concerns about our methodology. Community feedback is valuable in improving the accuracy and reliability of our screening:
Report a Screening Error
Email: shariah@barakfi.in
Please include: stock symbol, the concern or discrepancy observed, and any supporting data or references.
We review all reports within 5 business days. If a valid concern is identified, we will update the screening result and, where appropriate, issue a correction notice.
Our screening data and methodology are maintained on the following schedule: