Investment Account: Issues, Challenges and the Way Forward
The current Islamic banking products are merely resembling the conventional products, replacing interest-based to profit based; resulted to different in form but
merely similar in substance. In Malaysia, efforts are ongoing for a call to embrace risk sharing as their new source of funds through the Investment Accounts (IA)
products offering. This new product offered by Islamic bank with the aims to better position the current Islamic banking practices and promote true equity based financing. Supported by the Bank Negara Malaysia, IA provides a promising avenue with a wider range of risk-return preference for the investor to invest and participate in the real economy activities. However, there is considerable ambiguity in the nature and characteristics of IA in the actual practice of Islamic banks. The paper aims to examine the issues and challenges arising from the use of IA by Islamic banks, and to suggest a solution to the main issues, which will also greatly reduce other challenges faced.
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