Launch Partners

Tuesday, November 29, 2022

Launch Partners

Islamic sustainable investment and deposit accounts: An emerging effort

Sustainable investment and sustainable deposit accounts can be a gateway vehicle for Islamic sustainable finance and investment at an individual level. This type of product offering is slowly gathering momentum.

At the time of writing, there are still very few Islamic sustainable deposit and savings account product offerings in Malaysia, which is arguably the most mature Islamic finance market. Maybank Islamic launched the first Islamic Social Impact Deposit campaign offering in October 2020 to help in extending financial relief to those whose incomes have been affected by the COVID-19 pandemic.

In 2020, Standard Chartered Saadiq launched the Islamic sustainable deposit account in the UAE market. Standard Chartered Saadiq Malaysia recently rolled out the Islamic Sustainable Savings Account, which is the first such Shariah compliant offering by a bank in Malaysia. The savings balance in the account will support sustainable development through referencing the balance against qualifying green and sustainable activities funded by the bank.

“This offering aligns with Standard Chartered Saadiq’s plans to expand on its sustainable product offerings in alignment with Bank Negara Malaysia’s Value Based Intermediation Framework,” Bilal Parvaiz, the executive director of Islamic business and head of products at Standard Chartered Saadiq, told ISFI.

In the Malaysian conventional market, Standard Chartered Bank is the only bank offering a permanent sustainable fixed deposit offering. It launched its sustainable fixed deposit account in May 2019, which was touted as the world’s first sustainable fixed deposit offering. The bank has yet to launch the Islamic version of the sustainable fixed deposit offering.

There is currently only one Islamic sustainable term investment account offering in Malaysia which was announced as a pilot campaign by CIMB Islamic Bank on the 19th September 2022.

The CIMB Islamic Sustainable Term Investment Account-i (Sustainable TIA-i) is the sustainable tranche under its existing Islamic term investment account product.

While the term investment account is open to individual and non-individual investors, the sustainable tranche is piloted for the non-individual segment.

“The Sustainable TIA-i Tranche is piloted for the non-individual segment at this current juncture and the bank may choose to follow suit for other segments in the future,” a spokesperson from CIMB told ISFI.

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