islamic financial services act 2013 (ifsa) _ bank islam malaysia berhad

7/26/2019 Islamic Financial Services Act 2013 (IFSA) _ Bank Islam Malaysia Berhad

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Islamic Financial Services Act 2013 (IFSA)

Transition of Deposits from the Repealed Islamic Banking Act, 1983 (IBA)

to the Islamic Financial Services Act 2013 (IFSA) (/en/Documents/Notice-IFSA2013-en.pdf)

Frequently Asked Questions

1. Why is there a need to

reclassify the Islamic deposits?

Under the repealed

Islamic Banking Act 1983 (IBA), all monies accepted from customers are

classified as Islamic deposits, which comprise both deposit and

investment products.

The IFSA provides greater

legal clarity on application of the various types of Shariah financial

contracts, and ensure end-to-end compliance in full cycle of Islamic

banking operations e.g. investment account.

From market conduct

standpoint, the customers are able to clearly differentiate between

products which are principal guaranteed with those which are not.

2. How are the deposits being

classified?

Islamic Financial Services Act 2013 (IFSA)

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(http://www.bankislam.com.my/home/) Navigation

English
http://www.bankislam.com.my/home/http://www.bankislam.com.my/en/Documents/Notice-IFSA2013-en.pdf


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Islamic banks can offer

both products with principal guaranteed or non- principal guaranteed

feature.

However, Islamic banks

are required to classify such products as either Islamic deposit which

use Shariah contracts with principal guaranteed feature or investment

account which use Shariah contracts with non- principal guaranteed

feature.

Islamic Deposit(principal guaranteed Shariah contracts) Investment Account(non- principal guaranteed Shariah contracts)

Wadiah (custodian) Mudarabah (profitsharing)

Qard (loan) Wakalah (agency)

Tawarruq (sale)

3. What is the impact to

consumers?

Customers whose Islamic

deposit account are structured based on Shariah contract with

non-principal guaranteed feature will be duly informed of the

alternative products and provided with sufficient information/

transparency to make an informed decision.

Customers would have a

choice to either maintain their funds with Islamic deposit or change to

investment account product depending on the customers risk appetite.

Customers will be

accorded sufficient time to inform the Islamic banks of their decision.

During this process the Islamic banks will ensure that the rights of the

customers are protected.

4. When will this take effect

and how long is the transition period?


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To facilitate smooth

implementation of the reclassification process and ensure relevant

stakeholders interest are protected, Bank Negara Malaysia has formulated

a transition plan to allow Islamic banks to complete the process by 30

June 2015 (two year period from the enactment of IFSA).

5. Would my deposit be protected

by Perbadanan Insurans Am Malaysia (PIDM)?

During this transition

period, all the Islamic deposits under the repealed IBA will remain

status quo and continue to be eligible for PIDM protection until the

completion of the transition plan by the respective Islamic banks. After

the transition, Islamic deposits under the IFSA will remain eligible for

PIDM protection.

6. Will the returns and benefits

remain after the conversion?

Islamic banks will be

engaging their customers in providing information and clarification on

the transition as well as the deposits and investment products

available.

Islamic banks will also

provide alternatives or options to customer to meet their risk appetite

and returns.

7. Will the principal be

guaranteed after the conversion?

Onl for Islamic de osit


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products which use Shariah contracts with principal guaranteed as per

under the IFSA.

8. Will there be additional

charges or cost incurred to the consumers?

No charges will be

imposed to customers for the transition or migration.

9. Will consumer be notified

during the transition period?

The Islamic banking

institutions will engage with their customers in providing information

and clarification on the differences between the Islamic deposit and

investment account products as well as the options available to them to

either retain their placements in Islamic deposit or migrate to

investment accounts.

The Islamic banking

institutions will allow sufficient time for the customers to inform them

of their decision.

10. What are the channels of

contact for queries and information?

Islamic banking


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English (http://www.bankislam.com.my/home/islamic-financial-services-act-2013-ifsa/)

institutions will be making available hotlines, call centres and the

front line staff of their headquarters and branches to attend to further

queries by their customers.

Members of the public can

also contact the Association of Islamic Banks in Malaysia (AIBIM) at

03-20268002/ 8003 and Bank Negara Malaysia at BNMLINK at tel:

1-300-88-5465.

Source: Bank Negara Malaysia, 17 March

2014

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