INVESTMENT ACCOUNT PLATFORM (IAP): AN INNOVATIVE LIQUIDITY MANAGEMENT AVENUE FOR ISLAMIC DEPOSIT INSURANCE FUNDS IN NIGERIA
Abstract
Deposit Insurance Scheme (DIS) has been identified as one of the most significant component of financial safety net arrangement. It is aimed at consumer protection for the depositors and investors in the banking sector of nations' economy. The role of Islamic deposit insurance as a Shariah compliant version of a conventional deposit insurance scheme, is to create a level playing field between Islamic and conventional banks, apart from maintaining a foundation for public confidence in the banks, it is also to reinforce the consumer protection aspects that are inherent in Islam. Islamic deposit insurance has become more relevant of late due to the development of Islamic finance, which has grown rapidly not only in the Muslim world but also across the Western world. However virtually all the existing DISs are established on legal, regulatory and operational framework devoid of any Islamic bias, one of the greatest challenge facing the operations of Islamic deposit insurance in particular and the Islamic finance industry in general is the dearth of Shariah compliant avenue for the investments of Islamic funds or specifically the deposit insurance fund. This paper proposes the Investment Account Platform (IAP) structure as an innovative approach in managing liquidity and as a Shariah compliant option for the investment of the Islamic deposit insurance funds in Nigeria.
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