The IADI and IFSB jointly issue new guidance in the form of Core Principles for Effective Islamic Deposit Insurance Systems (CPIDIS)
Date posted: 12 July 2021
12 July 2021, Basel, Switzerland and Kuala Lumpur, Malaysia – The International Association of Deposit Insurers (IADI) and the Islamic Financial Services Board (IFSB) issued today new guidance in the form of Core Principles for Effective Islamic Deposit Insurance Systems (CPIDIS). The CPIDIS aim to provide guidance in the form of a set of core principles for the development and implementation of effective Islamic deposit insurance systems (IDIS), taking into consideration the characteristics of Shari’ah compliant contracts and specificities of Islamic banks, while complementing the existing international standards, mainly the IADI Core Principles for Effective Deposit Insurance Systems (November 2014).
Overall, the CPIDIS will promote stability and resilience in the Islamic Financial Service Industry (IFSI) and further integration of Islamic deposit insurance with the international architecture for financial stability.
In addition, the objectives of the CPIDIS are to:
- serve as a benchmark international framework to facilitate the development and implementation of an effective IDIS;
- enable the existing IDISs to identify best-practice gaps in their current modalities; and
- facilitate an independent, third-party or self-assessment of the compliance of an IDIS with CPIDIS.
By building upon their joint efforts, IADI and IFSB are envisaging that jurisdictions will use these CPIDIS and their compliance assessment methodology as a benchmark for assessing the quality of their IDIS and for identifying gaps in their Islamic deposit insurance practices, including measures to address them. This work will continue with a series of pilot tests for the CPIDIS, which will be used to help develop a joint IADI-IFSB Handbook for the Assessment of Compliance with the CPIDIS to further develop and support this guidance standard going forward.
The softcopy of the CPIDIS is available on both the IADI, www.iadi.org, and the IFSB websites, www.ifsb.org in English and Arabic versions.
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