Deposit Insurance from the Shariah Perspective

International Association of Deposit Insurers

No 10-02, IADI Research Papers from International Association of Deposit Insurers

Abstract: Deposit insurance is relatively new to the Islamic financial world and it has attracted a lot of interest as regards understanding its permissibility from the Shariah (Islamic law) perspective, and the differences between Islamic or Shariah-compliant and conventional deposit insurance systems. This paper discusses briefly the arguments put forward by deposit insurance practitioners as to why deposit insurance is permissible under Shariah, and the differences between Islamic and conventional deposit insurance systems. The paper does not provide any fatwa on Islamic deposit insurance but rather presents some related Shariah views. The paper also discusses approaches in designing an Islamic deposit insurance system (IDIS), and describes the approaches taken by Malaysia and Sudan in developing their IDIS.

Keywords: deposit insurance; bank resolution (search for similar items in EconPapers)
JEL-codes: G21 G33 (search for similar items in EconPapers)
Date: 2010-02
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