Our Screening Methodology
We screen according to the global Islamic finance benchmark AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions). Every formula, exclusion criteria, and mathematical threshold is completely public.
What is AAOIFI and which standard do we follow?
Based in Bahrain, AAOIFI is the most prestigious Islamic financial standards authority in the world, adopted across central banks, Shariah supervisory boards, and multi-billion dollar Islamic asset managers in over 100 countries. Tayyib strictly applies Shariah Standard No. 21 (Financial Papers / Shares) and Standard No. 59 (Sale of Debt) to Indian equities listed on the NSE and BSE.
Business Activity Screen (Sector Level)
Before financial balance sheets are evaluated, a company’s primary line of business must be permissible:
Haram Sectors (Excluded)
Core business activities are impermissible under Shariah law. Automatically excluded without financial ratio testing:
Questionable / Mixed
Permissible conditionally under AAOIFI if ratios pass, but strictly excluded in Taqwa Mode for maximum caution:
Permissible Sectors
Core commercial activity is permissible. If the company passes all 3 financial ratio tests, the stock is Halal:
Scholarly Rationale for Sector Exclusions
3 Core Financial Screening Ratios
If a company’s core sector is permissible, its quarterly balance sheet and income statements must pass all 3 AAOIFI financial ratio thresholds:
1. Debt Ratio
Maximum Interest-Bearing Debt (≤30%)
2. Cash & Securities Ratio
Interest-Bearing Securities Exposure (≤30%)
3. Non-Halal Income Ratio
Impure Revenue Tolerance (≤5%)
Test Financial Ratios Live
Adjust the financial metrics below to simulate how the AAOIFI Shariah screening engine calculates compliance in real time:
What is Tazkiyah (Dividend Purification)?
If an otherwise Halal company earns minor interest on short-term deposits or auxiliary non-core revenue under the 5% limit, investing is permissible. However, an equivalent percentage of dividends must be purified and donated to charitable causes without expecting spiritual reward (sadaqah bila thawab).
What is Taqwa Mode and why did we build it?
Many Muslim investors prefer maximum caution (wara') and wish to avoid borderline or questionable stocks. Taqwa Mode is built for investors who demand stricter thresholds:
| Parameter | Standard AAOIFI | Tayyib Taqwa Mode |
|---|---|---|
| Debt to Market Cap | ≤ 30% | ≤ 20% (Strict) |
| Cash to Market Cap | ≤ 30% | ≤ 20% (Strict) |
| Non-Halal Revenue | ≤ 5% | ≤ 1% (Near-zero tolerance) |
| Questionable Sectors (Defense, Entertainment) | Conditional (Ratio based) | Completely Excluded |
Scholar Attribution & Review
Tayyib’s screening algorithms and financial ratio rules have been formulated in consultation with qualified Islamic finance researchers. This platform does not serve as an ongoing personalized fatwa, but as a faithful technological implementation of the globally approved AAOIFI framework.
- Stock exchange disclosures and corporate balance sheets are filed on a quarterly schedule; ratios reflect the latest official public disclosures.
- Some companies do not explicitly itemize minor non-core interest income, requiring prudent manual scrutiny.
- Tayyib is an automated computational screening tool. In case of doubt or significant allocations, consult a trusted scholar.
Questions or feedback regarding our screening?
We welcome peer review. If you identify any corporate reclassification or ratio discrepancies, contact us: