IMPORTANT UPDATE: Enhancement to the Shariah Screening Criteria

Being a global leader for Shariah equity screening methodology development and execution, we at Islamicly constantly endeavour to keep you updated with the latest scholarly thought in this space.

In line with our vision, we have always been working with our Shariah board of scholars, who are globally considered pioneers in the Shariah equity methodology space, to bring to you the latest scholarly thought.

The Islamicly Shariah board has made certain enhancements to the Shariah equity screening criteria in its Shariah Scholars Board Meeting held on 28th July 2026.

Change 1: Re-introduction of cash ratio

Previous:

In the June 2024 update, the Cash Compliance and Accounts receivables ratio was removed

The cash ratio was measured as: (Cash + Interest Bearing Securities) / Market value of Equity (36 month average) <33%

The Accounts receivables ratio was measured as: Accounts Receivables / Market value of Equity (36-month average) < 49 %

Change:

The cash ratio has now been re-introduced and the threshold has been set at 30%

The cash ratio will be measured as:

(Cash & Deposits + Interest Bearing Securities) / Market value of Equity (36 month average) <30%

Explanation:

This is done to bring the screening methodology perfectly in line with the AAOIFI standards.

Change 2: Reducing the Debt and cash ratio tolerance thresholds

Previous:

The Debt and Cash Compliance ratio thresholds were capped at 33%.

The Debt Ratio was measured as:

(Debt / Market value of Equity (36 month average) <33%

The Cash Ratio was measured as:

(Cash + Interest Bearing Securities) / Market value of Equity (36-month average) < 33 %

Change:

The debt and cash ratio thresholds has now been set at 30%

The Debt Ratio will now be measured as:

(Debt / Market value of Equity (36 month average) <30%

The cash ratio will be measured as:

(Cash & Deposits + Interest Bearing Securities) / Market value of Equity (36 month average) <30%

Explanation:

This is done to bring the screening methodology perfectly in line with the AAOIFI standards.