What is the 30% rule in Islamic finance?

Written by Editorial Team | Last Updated: August 2026

The thirty percent rule in Islamic finance—frequently associated with Sharia-compliant equity screening methodologies—relates to debt and interest-bearing asset thresholds. Sharia boards and financial indexes often stipulate that a publicly traded company's total debt-to-market-capitalization ratio or its interest-bearing securities relative to total assets must not exceed thirty percent. If a corporation exceeds this financial ratio, its stock is deemed non-compliant, and devout Muslim investors are prohibited from purchasing or holding equity shares in that specific company.

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