Shariah Compliance Checker
THE COMPANY'S ACCOUNTS
Does it pass the KMI Shariah screens?
Use the latest audited annual or half-year accounts. The figures below are an example company, not the stock you pick.
PSX cut the debt limit from 37% to 33% of total assets from the November 2026 recomposition (notice PSX/N-244). Accounts usually print "Rupees in thousand".
1What it does
Switch off for conventional banks, insurers and leasing companies, or alcohol, pork, gambling, tobacco or explosives.
2Balance sheet
3Income
4Liquid assets test
Example number. Replace it with your own.
KMI SCREEN, FROM NOVEMBER 2026
This is the example company in the form. Replace its accounts with the ones you want to test.
COMPLIANT
6 of 6 screens passed.
3 of 5 stars on the PSX rating
Pick a stock to see whether it is in the KMI All Share index today.
THE SIX SCREENS
All six must pass
- Pass
1.Core business is Shariah compliant
You marked the core business as compliant. Limit: must be yes.
- Pass
2.Interest-bearing debt to total assets
20% of total assets. Limit: below 33%.
- Pass
3.Non-compliant investments to total assets
5% of total assets. Limit: below 33%.
- Pass
4.Non-compliant income to total revenue
0.4% of total revenue. Limit: below 5%.
- Pass
5.Illiquid assets to total assets
60% of total assets. Limit: at least 25%.
- Pass
6.Price against net liquid assets per share
Net liquid assets are Rs 10.00 per share; the price is Rs 150.00. Limit: price at or above it.
The dark tick on each bar is the limit; the coloured part is the company's own figure.
PURIFY YOUR DIVIDENDS
Give away Rs 0.4 of every Rs 100
The share of each dividend earned from non-compliant income (0.4%), usually given to charity. Work out the amount on your own holding with the dividend purification calculator.
Net liquid assets: Rs 5,000 million, Rs 10.00 per share.
THE PSX COMPLIANCE RATING
3 of 5 stars
- No non-compliant debt, investment or income (all three ratios are 0%)
- Debt and investment ratios below 11% and income ratio below 2%
- Debt and investment ratios below 22% and income ratio below 4%
From PSX notice PSX/N-244, for KMI All Share companies, applied from the November 2026 recomposition.
A screening aid, not a ruling. The final Shariah status is decided by the index provider, PSX with its Shariah advisor and Al Meezan, from audited accounts and the full methodology, including an assessment of the business itself.
The six KMI screens
The KMI indices, developed by Al Meezan with the Karachi Stock Exchange (now PSX), admit a stock only if it meets all six Shariah screens below. Five are balance sheet and income tests; the first is about what the company does.
| Screen | Limit | What it measures |
|---|---|---|
| Business activity | Must be compliant | No conventional banking, insurance or leasing, alcohol, pork, gambling, tobacco or explosives |
| Interest-bearing debt ÷ total assets | Below 33% (was 37%) | Conventional loans, bonds, TFCs, commercial paper, finance leases and preference shares |
| Non-compliant investments ÷ total assets | Below 33% | Conventional funds, PIBs, T-bills, NSS, interest-bearing deposits, derivatives, non-compliant companies |
| Non-compliant income ÷ total revenue | Below 5% | Interest, derivative income, conventional insurance claims, late-payment penalties, dividends from non-compliant companies |
| Illiquid assets ÷ total assets | At least 25% | Property, plant and equipment, stock in trade, stores and spares, raw materials and work in progress: assets whose price can move away from par |
| Market price ÷ net liquid assets per share | Price at or above | The price must not be below the value of the company's net liquid assets per share |
- Net liquid assets
- total assets − illiquid assets − long-term liabilities − current liabilities
- Shares
- ordinary shares outstanding
- Price
- the market price used at the review (the March 31 or September 30 price)
What changed for the November 2026 recomposition
PSX notice PSX/N-244, issued on February 26, 2026 after SECP approval dated February 20, 2026, made three changes. The interest-bearing debt limit fell from 37% to 33% of total assets. A Shariah compliance rating, with three star tiers, was introduced for KMI All Share companies. And an objection window of five working days was added for companies to ask PSX to reconsider their status. The changes apply from the November 2026 recomposition on June 2026 accounts.
The star tiers, which the calculator shows for a company that passes every screen under the November 2026 rules:
- 5 stars: No non-compliant debt, investment or income (all three ratios are 0%).
- 4 stars: Debt and investment ratios below 11% and income ratio below 2%.
- 3 stars: Debt and investment ratios below 22% and income ratio below 4%.
The index is recomposed twice a year: in May on December 31 accounts and in November on June 30 accounts. Use the screening-rules switch in the calculator to see how a company would have fared under either limit.
A worked example
A company has total assets of Rs 100,000 million, of which interest-bearing debt is Rs 35,000 million, non-compliant investments Rs 5,000 million and illiquid assets Rs 60,000 million. It earns Rs 50,000 million of revenue, with Rs 200 million of non-compliant income. It has long-term liabilities of Rs 15,000 million, current liabilities of Rs 20,000 million and 500 million shares trading at Rs 150.00.
| Screen | Ratio | Before Nov 2026 (37% debt limit) | From Nov 2026 (33% debt limit) |
|---|---|---|---|
| Interest-bearing debt | 35% | Pass | Fail |
| Non-compliant investments | 5% | Pass | Pass |
| Non-compliant income | 0.4% | Pass | Pass |
| Illiquid assets | 60% | Pass | Pass |
| Price vs net liquid assets | Rs 10.00 per share vs Rs 150.00 | Pass | Pass |
| Overall | Pass | Fail |
At 35% debt to assets, the company passed under the earlier limit and fails under the new one, even though nothing about the business changed. Its purification ratio is 0.4%: about Rs 0.4 of every Rs 100 of dividend would be given to charity. Work out your own amount with the dividend purification calculator.
What this checker misses
- The business screen is a judgement. Whether a company's core activity is compliant is decided by the Shariah advisor from its actual operations, not by a ratio. You tell the calculator the answer with a switch.
- Classifying the numbers is the hard part. What counts as interest-bearing debt or a non-compliant investment sits in the notes to the accounts, and the reviewers apply the published definitions line by line. A small difference in classification can move a ratio across a limit.
- Timing. PSX screens on the latest annual or half-year accounts and a set price date. Your inputs may be newer or older, so the live KMI list can differ.
- Other Shariah indices differ. International and other local screens use different ratios and bases, such as market capitalisation instead of book assets, so a stock can pass one and fail another.
- Compliance is not quality. Passing the screens says nothing about whether a company is a good investment. Pair it with the intrinsic value calculator or the zakat calculator for what you owe on your holding. To see which of several stocks are in the KMI All Share index today, next to their prices and ratios, use the stock comparison.
Sources and assumptions
Screening limits checked October 31, 2026 against the PSX All Shares Islamic Index brochure and PSX notice PSX/N-244 (February 26, 2026).
- PSX, All Shares Islamic Index of Pakistan: methodology and screening criteria (brochure, developed by KSE and Meezan Bank)
- PSX Notice PSX/N-244, February 26, 2026: Revision of KMI Indices Shariah Screening Methodology (debt limit 37% to 33%, compliance rating, objection window)
- Live KMI All Share membership: Investify PSX index data
This checker is a screening aid, not a Shariah ruling. The final status is decided by the index provider and the Shariah advisor. Results are estimates for information and planning only, not tax, legal or investment advice. Check your own case with a tax adviser, your broker or the official source before acting.
FAQ
Shariah Compliance Checker: common questions
What are the KMI Shariah screening criteria?+
A company must pass six tests. Its core business must be Shariah compliant. Interest-bearing debt must be below 33% of total assets (it was 37% before the November 2026 recomposition). Non-compliant investments must be below 33% of total assets, non-compliant income below 5% of total revenue, and illiquid assets at least 25% of total assets. Finally, the market price per share must be at least the net liquid assets per share.
When does the 33% debt limit apply?+
PSX notice PSX/N-244 of February 26, 2026, issued after SECP approval dated February 20, 2026, cut the interest-bearing debt limit from 37% to 33% of total assets. It applies from the November 2026 recomposition, which is based on June 2026 annual and half-yearly accounts. Until then, the earlier 37% limit applied. The calculator lets you test a company under either.
What is the difference between the KMI All Share and KMI-30 indices?+
The KMI All Share index contains every listed company that passes the Shariah screens, so it is the full Shariah-compliant universe. The KMI-30 tracks a smaller set of 30 selected companies from that universe. A company has to be Shariah compliant to be in either, which is why this calculator reports membership of the KMI All Share index.
How often is the KMI list updated?+
The index is recomposed twice a year. The May recomposition uses accounts for December 31, and the November recomposition uses accounts for June 30. A company can therefore pass or fail in one review and change in the next, as its balance sheet changes.
What is the dividend purification ratio?+
Even a compliant company can earn a little non-compliant income, such as interest on bank deposits. The purification ratio is that income as a share of total revenue. Investors commonly give the same share of each dividend to charity so that none of the non-compliant income benefits them. The dividend purification calculator turns the ratio into a rupee amount for your holding.
Is this a fatwa that a stock is halal?+
No. It is a screening aid that applies the published ratios to numbers you enter. The final Shariah ruling is made by the index provider and the Shariah advisor, using audited accounts and an assessment of the company's actual business that no ratio calculator can make.
Why can a stock pass here but not be in the KMI All Share index?+
The live index shows the status from the latest published recomposition, based on older accounts and, until November 2026, the earlier debt limit. Your figures may be newer, may be entered differently, or the business activity may fail the qualitative screen. Where the two disagree, the published PSX list governs.
Keep going
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