Are deposit and investment accounts in Islamic banks in Malaysia interest-free ?
Other Title(s)
هل ودائع و حسابات الاستثمار في البنوك الإسلامية في ماليزيا غير قائمة أو خالية من الفائدة ؟
Joint Authors
al-Anwar, Khair
Iskandar, Muhammad Shah
Muhammad, Shamshir
Source
Journal of King Abdulaziz University : Islamic Economics
Issue
Vol. 27, Issue 2 (30 Jun. 2014), pp.32-62, 31 p.
Publisher
King Abdulaziz University Scientific Publishing Center
Publication Date
2014-06-30
Country of Publication
Saudi Arabia
No. of Pages
31
Main Subjects
Financial and Accounting Sciences
Religion
Islamic Studies
Topics
- Banks
- Islamic jurisprudence
- Islam
- Financing
- Profits
- Investments
- Small enterprises
- Malaysia
- Religious aspects
- Bank deposits
- Banking
- Usury
- Banking services
- Islamic Banks
- Finance companies
- Accounts
Abstract EN
Islamic banking and Finance (IBF) provides products and services guided by the Sharīʿah.
Therefore, they are supposed to be different from their conventional counterparts.
Islamic deposit rates should be different from conventional deposit rates.
Islamic banking profit rates are supposedly less risky due to risksharing attribute embedded in their structure as compared to the Conventional banking interest rates on similar-risk investment products.
This paper addresses this concern by examining the differences in the monthly fixed deposit rates of conventional and investment deposit rates of Islamic banks and finance companies in Malaysia for the period from January 1994 to December 2012 and determines the causality relationship between profit rates and interest rates on these investments.
The findings suggest that profit rates of Islamic banks are significantly linked with interest rates of conventional banks.
The findings also indicate that profit rates of Islamic banks and finance companies are affected by the movements of interest rates of conventional banks and finance companies respectively and not vice versa.
The findings imply that there is a gap between Islamic banking theory and practice.
Lack of infrastructure for full compliance and lack of stringent enforcement of regulatory requirements are possible reasons for such behavior of Islamic financial institutions in Malaysia.
American Psychological Association (APA)
al-Anwar, Khair& Muhammad, Shamshir& Iskandar, Muhammad Shah. 2014. Are deposit and investment accounts in Islamic banks in Malaysia interest-free ?. Journal of King Abdulaziz University : Islamic Economics،Vol. 27, no. 2, pp.32-62.
https://search.emarefa.net/detail/BIM-662289
Modern Language Association (MLA)
al-Anwar, Khair…[et al.]. Are deposit and investment accounts in Islamic banks in Malaysia interest-free ?. Journal of King Abdulaziz University : Islamic Economics Vol. 27, no. 2 (Jun. 2014), pp.32-62.
https://search.emarefa.net/detail/BIM-662289
American Medical Association (AMA)
al-Anwar, Khair& Muhammad, Shamshir& Iskandar, Muhammad Shah. Are deposit and investment accounts in Islamic banks in Malaysia interest-free ?. Journal of King Abdulaziz University : Islamic Economics. 2014. Vol. 27, no. 2, pp.32-62.
https://search.emarefa.net/detail/BIM-662289
Data Type
Journal Articles
Language
English
Notes
Includes appendices : p.57-60
Record ID
BIM-662289