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This paper aims to make a first attempt to highlight the Sharīʿah-compliance challenges of existing Sharīʿah-compliant deposit insurance schemes (SCDIS), particularly the issue of subrogation to contributing parties in takāful-based SCDIS and the issue of receiving a fee for guarantee in kafālah-based SCDIS. The paper also aims to propose an additional cash waqf SCDIS structure that mitigates these challenges.

The proposed cash waqf scheme is assessed for compliance against classical works of Islamic jurisprudence and the contemporary regulations and standards of best practices for deposit insurance schemes.

The proposed cash waqf SCDIS structure is able to overcome the Sharīʿah and legal challenges in the existing SCDIS modalities, including subrogation and payment of fees for guarantee. Moreover, it is designed to comply with the International Association of Deposit Insurers’ Core Principles for effective deposit insurance schemes. Hence, a cash waqf structure is a viable alternative for jurisdictions to introduce SCDIS.

This paper introduces an additional cash waqf SCDIS modality and sets the foundation for future research in studying viable Sharīʿah-compliant deposit insurance modalities supporting a stable and resilient Islamic banking industry.

This paper aims to provide an essential framework for establishing Shariah-compliant deposit insurance scheme, by reviewing the Shariah provisions concerning the available approaches for deposit guarantee, types of deposits in Islamic financial institutions and the permissible party to incur the cost of this guarantee.

This paper reviews the Fiqh rules and principles approved by the well-known Islamic Fiqh references, as well as the resolutions of International Islamic Fiqh Academy (IIFA) and Shariah standards issued by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), and presents these resolutions and judgments in a modern applicable way.

This paper recommends that the Islamic scheme for deposit insurance should be established based on Takaful insurance principle, and this scheme must adopt fund segregation principle to comply with Shariah provisions for guarantee permissibility.

The paper bridges the gap between theory and practice by highlighting how the proposed model can be initiated in practice, thus, it can influence public policy in countries with Islamic banking system.

This paper represents a significant contribution toward the establishment of a consensual Shariah-compliant Islamic deposit insurance model.

The purpose of this study is to explore stakeholders’ perceptions on money creation and the impact of the accounting treatment for commercial banks’ money lending activity in Malaysia.

A phenomenological approach was used to examine the stakeholders’ perceptions through experience-sharing. A semi-structured interview approach was used to collect the data. Ten individuals from different stakeholder groups have been interviewed with their prior consent. For the data analysis, the current study adopted the inductive thematic approach.

Perceptions on money creation are influenced by the informants’ understanding and awareness of the research issue. Informants have agreed on the accounting treatment (debit loan and credit deposits) but explained the impact of this accounting treatment differently. The accounting treatment creates an opportunity for the commercial banks to create money as they want, and hence, the excess created money can create inflation and threat for the potential financial crisis. On the contrary, it is argued that money creation results from the systematic approach of the fractional reserve banking (FRB) in Malaysia. In addition, this money creation is not a threat to the economy as long as there is a strong controlling role of Bank Negara Malaysia (BNM).

Stakeholders’ perception indicates that awareness of the research issue can be a cause of crucial consequence for money lending activity. Moreover, this study may stimulate the chief regulatory body such as BNM, the central bank of Malaysia, to be more cautious in controlling the commercial banks’ money lending activity to prevent the potential future crisis. Furthermore, findings may help to explain the conflicting concept between the textbook explanation for FRB and current commercial banks’ money lending practice through the accounting treatment.

Monitoring and controlling of money creation and commercial banks’ money lending activity by BNM can be benefited from the stakeholders’ perceptions on this research issue. Because this is the first time study of the stakeholders’ perceptions on money creation and commercial banks’ money lending activity in Malaysia and hence, findings of this study may be worked as the input in the process of monitoring and controlling the money creation activity in Malaysia.

Presents a paper written by Lauchlin Currie in November 1992 in which he identifies and defends the concepts of money and the demand for it. The paper argues that the heavy cost of maintaining checking accounts is not reasonably explained by the conventional listing of motivations, especially in the case of large deposits. A new hypothesis is given on the demand for money. The paper concludes that checking accounts possesses the further essential quality of being quantitatively subject to control, which in turn permits a limitation of the total quantity of demand deposits and hence of money.

The objective of this study is to investigate the impact of selected economic variables on deposits level in the Islamic and conventional banking systems in Malaysia.

Both long‐ and short‐run relationships between these variables are measured by using advanced time series econometrics. These techniques are co‐integration and error correction framework, which are conducted within the vector autoregression framework.

By applying recent econometric techniques, we find determinants such as rates of profit of Islamic bank, rates of interest on deposits of conventional bank, base lending rate, Kuala Lumpur composite index, consumer price index, money supply and gross domestic product have different impact on deposits at both Islamic and conventional banking systems. In most cases, customers of conventional system behave in conformity with the savings behaviour theories. In contrast, most of these theories are not applicable to Islamic banking customers. Therefore, there is a possibility that religious belief plays an important role in the banking decisions of Muslim customers.

As customers are sensitive to rewards, they receive from their deposits, rates of profit of Islamic system must at any time be similar to those of the conventional system. Finally, religious dimension can be considered as an important element to attract more people to deposit their funds in the Islamic system.

To the best of the authors’ knowledge, this is the first attempt to empirically examine the depositor's behaviour in the Islamic banking environment.

This paper aims to develop a novel approach to Islamic deposit insurance, specifically addressing the deficiencies in the current prevailing models of Islamic deposit insurance.

The analysis in this paper adopts a qualitative content analysis approach to review the existing literature on Islamic deposit insurance and propose a new model.

The proposed model includes a revised scheme. In the event of a bank failure, the funds used to reimburse depositors of the failed bank are divided into two distinct categories. The first category includes nonrepayable premiums that have been previously paid by the failed bank and managed by the Islamic deposit insurance agency or Islamic deposit insurance corporation. The second category comprises qard hasan, an interest-free loan provided by the Islamic deposit insurance agency or Islamic deposit insurance corporation using the deposit insurance funds from the collective pool of premiums of other banks.

The proposed model ensures that well-managed banks are not unfairly burdened by the failures of their poorly managed counterparts, thus preventing a sense of unfairness and inefficiency. Implementing the proposed model may result in higher business practices and risk management standards, ultimately leading to better depositors’ protection and banking system’s stability.

This paper offers a significant contribution to the limited literature on Islamic deposit insurance. The proposed model enriches the discourse and offers valuable insights for the future development of Islamic banking.

This paper aims to investigate the economic substance of Islamic banks’ transaction as perceived by the employees and regulators of banks and the effect of such substance on the need for special accounting standards for Islamic banks. If there is a distinctive “Islamic economic substance”, then special accounting practices may be necessary such as the standards of the Accounting and Auditing Organization for Islamic Financial Institutions.

A qualitative inquiry on one of the leading Islamic banks in the Middle East was conducted to investigate the economic substance of the bank’s main two transactions; the deposit system and Murabaha financing, as perceived by informants within one of the earliest Islamic banks and its regulators.

It is found that despite the belief that the transactions under examination were different from equivalents within conventional banking, practice within the bank was not consistent with such a belief. Informants largely perceived the economic reality of the investigated transaction as being not different from conventional banks’ transactions, and this would affect the need for special accounting and regulatory frameworks.

This investigation is confined to informants working within one Islamic bank; their views and perceptions may not coincide with those working in other Islamic banks in the world.

The results of this investigation provide policy implications for Islamic banks, regulators and standards setters in regard to the need for special accounting standards for Islamic banks.

The paper is one of the first papers that uses a qualitative inquiry on the main transactions of Islamic banks and the related need for special accounting practices. The paper provides a new perspective on the debate over whether Islamic banking is genuinely innovative or is merely a replicate for conventional banking.

The purpose of this paper is to study how the foreign currency account (FCA) is affected by the domestic fixed deposit (FD) rate, the FCA rate, the expected exchange rate and exchange rate risk.

This paper analyses the causal relationship between the domestic FD rate, the FCA rate, the expected exchange rate on a set of foreign currency deposits and exchange rate volatility, based on the theory of portfolio choice. Based on the theory, the panel vector autoregressive regression of fully modified ordinary least squares and dynamic ordinary least squares are modelled.

There is no cointegrating relationship for the three-month FCA deposits, the domestic FD rate, the FCA rate and the expected exchange rate. Only the six-month FCA business deposits are affected by the domestic FD rate, the FCA rate and the expected exchange rate. The FCA depositors are not affected by exchange rate volatility.

This study is conducted based on the FCA rate quoted by the leading commercial banks in Malaysia, Maybank. Thus, the FCA rate is used as a proxy for the FCA rate of commercial banks in Malaysia.

Individual depositors have to save in more than the three-month FCA to realise their expected return. For individuals, the FCA deposit is not an alternative choice to domestic FD. Exporters may use the FCA deposit to finance their foreign purchases to save the cost of foreign exchange conversion but it is still not an appropriate hedging tool against foreign exchange fluctuations as compared to the existing forward foreign exchange facility.

This paper aims to analyse the role of central bank digital currency (CBDC) in bank earnings management and focus on how CBDC activity might influence banks to engage in accrual earnings management using loan loss provisions (LLPs) and the implications for earnings quality.

The paper used conceptual discourse analysis to explain the role of CBDC in bank earnings management.

Banks will use accruals, such as LLPs, to manage earnings when CBDC-induced bank disintermediation leads to a reduction in bank deposits, a reduction in bank lending and a likely reduction in reported earnings. Bank managers will mitigate the reduction in reported earnings by lowering discretionary LLPs to increase reported earnings.

The recent emergence of CBDC in the digital currency universe has led to increased research interest on the role of CBDC in corporations and society. This study contributes to the literature by focusing on banks, and examining the effect of CBDC on bank earnings management.

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