Maybank Islamic expects customers to switch to Mudarabah Investment Account

Chief Executive Officer Muzaffar Hisham said the 350,000 customers of the bank's existing Mudarabah deposit products had been given until May 31, 2015 to consent to either have their accounts reclassified as IA or other Shariah-compliant deposit products.

He anticipated some 70-80 per cent of customers to make the switch as the IA was a compliance requirement arising from the central bank's Islamic Financial Services Act 2013.

The IA will take effect on June 16, 2015 and will see the bank investing in a diversified portfolio of assets with capital preservation being a central objective for the management of the IA.

"Customers have the choice of not responding to the deadline.

"If they do not respond by the deadline or indicate they are not opting for the investment account, they will be reclasiffied to other Shariah-compliant deposit including Wadiah," he said.

Muzaffar was speaking to reporters after the announcement of the Mudarabah IA today.

He said the current features of the current and savings account (CASA) deposit comprised zero to two per cent indicative profit per annum while the profit payment frequency was either monthly, half-yearly or annually.

"Under the Investment Account, we are looking at potential returns of between 1.0 per cent and 3.5 per cent for CASA based on fund performance and profit will be paid monthly," added Muzaffar.