The role of Islamic deposit insurance is to create a level playing field between Islamic and conventional banks apart from maintaining a foundation for public confidence to the banks, says Malaysia Deposit Insurance Corp (MDIC) chief executive officer Jean Pierre Sabourin.
“Apart from that, the role of Islamic deposit insurance is to reinforce the consumer protection aspects that are inherent in Islam,” he said at the 3rd Islamic Financial Services Board (IFSB) Public Lecture on Financial Policy and Stability yesterday.
In his lecture on the Role of Islamic Deposit Insurance in Providing Stability to the Islamic Financial System, Sabourin said the Islamic deposit insurance system in Malaysia, established in September 2005, was to provide equivalent protection for insurable Islamic deposits.
“Endorsed by the Syariah Advisory Council of Bank Negara and administered by MDIC, fund reserves under Islamic deposit insurance is invested only in syariah-compliant instruments and syariah-compliant activities,” he said.
Earlier, the Council of IFSB admitted eight new organisations into its membership after being approved at its 15th meeting. IFSB is an international standard-setting organisation to promote and enhance the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry.
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