Page 130 - Special Topic Session (STS) - Volume 1

STS419 Zuraeda Ibrahim et al.
1. Introduction
An investment account is distinguished from an Islamic deposit in that an
investment account is defined by the application of Shariah contracts with a
non-principal guaranteed feature for the purpose of investment. In other
words, when a consumer places money in an Islamic bank through an
investment account, the Islamic bank may share the profit generated from the
investment, but it is not obligated to compensate the consumer if the
investment is not successful. There may be a good chance that a consumer
who places money in an investment account may be able to earn more than if
money is placed in a deposit account, but there is also no guarantee by the
Islamic bank that a consumer will receive all of his investment back. The
concept of no risk, no return is embedded in the concept of the investment
account. In Malaysia there are two types of profit sharing investment accounts
(PSIAs) that have been widely offered by Islamic banking institutions in
Malaysia; namely general investment accounts (GIA), and specific investment
accounts (SIA). Mudarabah is a profit sharing contract that has been widely
used to structure the GIAs, SIAs and other profit sharing instruments or
products in Islamic banking. Notwithstanding this, the IFSA 2013 provides an
adequate legal basis to support the further strengthening of investment
account operations in that it provides appropriate protection to investment
account holders whilst ensuring financial stability of the Islamic financial
system. The priority of payment for investment accounts upon liquidation of
the Islamic financial institution is treated separately from Islamic deposits, in
accordance with the rights and obligations accrued to the Investment Account
Holder (IAH) that are also provided. Islamic banking has emerged as a feasible
banking system over the past two decades and this has consequently resulted
in growth in the size and numbers of Islamic banks (Metawa & Almossawi,
1998). Since its emergence, a considerable body of literature has examined
consumers’ perception, awareness and satisfaction towards Islamic banking
products, services, practices and operations (Akhbar, Ali Shah & Kalmadi, 2012;
Karim, 2012; Unegbu & Onuoha, 2010). To date, no research has examined
consumers’ perceptions, knowledge and acceptance of Corporate Consumers
towards investment accounts in Malaysia, although prior research has
identified many factors that may influence satisfaction, behaviour and
awareness of products and services of Islamic banks. Therefore, this research
examines consumers’ perceptions, knowledge and acceptance towards the
concept of investment accounts in Islamic banking.

2. Methodology
In order to enable this initiative to reach the target respondents, the study
was conducted using both esurvey and hardcopy questionnaires as an
instrument to collect data. The UiTM E-Survey system known as Perseus was

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