FAQs

Question

What is Secondary Business Non-Compliant Category?

Answer

This is the set of companies whose primary business (principal business) is Shariah Compliant. But the company has one or more secondary business/es or investments which may not be compliant as per the Shariah. As a result, the company will be treated as "Secondary Business Non-Compliant". For example, Larsen & Toubro’s principal business activity is Engineering; whereas the company does have other verticals in the fields of finance, insurance and IT (of which the first two are in non-compliant businesses. The non-compliant businesses could be organized either as divisions of the company itself or registered as independent entities (may be, even with their own subsidiaries too). If any of these subsidiary businesses (irrespective of whether they are organized as divisions or separate entities) are non-compliant, then the parent company too may become non-compliant (if the income from the non-compliant businesses along with that of the main company, exceeds 3% of the total income of the parent company ‘s income on consolidated basis).


and Allah knows the Best...