Researchers from Universitas Sebelas Maret (uns.official) and Université de…

Researchers from Universitas Sebelas Maret (uns.official) and Université de Limoges (univ_limoges) recently investigated whether the introduction of Islamic Deposit Insurance (IDI) influences deposit flow of and the pricing by Islamic banks compared with conventional banks in Indonesia. Using the December 2014 announcement of a separate deposit insurance scheme for Indonesia’s Islamic and conventional banks as an exogenous event, they employ a difference in differences framework with matched bank level data, comparing periods before and after the policy announcement. They find that the introduction of Sharia compliant deposit insurance significantly increases deposit flows into Islamic banks, with the most pronounced effect seen in the accelerated growth of small deposits compared to conventional banks. This research provides insights into how a Islamic deposit insurance system can strengthen depositor’s trust and support overall financial stability.

Download the full paper “Sharia-Compliant Deposit Insurance and Deposit Flows: Evidence from a Dual Banking Market” by Putra Pamungkas (putrapam), Laetitia Lepetit, and Clovis Rugemintwari via the link in our Instagram bio.

Publish your insightful research in the fields of Islamic economics, monetary economics, and finance by submitting your paper to Journal of Islamic Monetary Economics and Finance (JIMF) via www.jimf-bi.org.

#JIMF #ShariaCompliant #DepositInsurance #DualBanking #IslamicFinance #FinancialStability #BankingResearch #DifferenceInDifferences #BankDeposits #IslamicEconomics

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