Bank Islam launches dual currency investment product
Posted on June 5, 2012, Tuesday
KUALA LUMPUR: Bank Islam Malaysia Bhd (Bank Islam) launched its Islamic Dual Currency Investment-i (DCI-i) yesterday, a deposit product that is expected to earn higher returns than regular foreign currency deposits.
Bank Islam’s DCI-i is a fixed deposit product linked to the performance of a pair of foreign currencies based on the concept of Wakalah-lil-Istithmar – an agency contract for investment – that meets both local and international syariah standards.
“The product is expected to appeal to the bank’s existing customers who are already investing in dual currency structured investments or those with foreign currencies commitments or obligations, such as payment for education abroad,” Bank Islam’s head of Treasury, Norashikin Mohd Kassim said in a statement here.
“It will also be an alternative risk management tool for Malaysian institutions or corporations seeking to manage their foreign currency exposures using a syariah compliant product,” she added.
The product essentially allowed investors the flexibility to determine their own parameters when planning investments.
DCI-i was targeted at investors who have views on the price movements of foreign currencies and those seeking potentially higher short term returns than traditional deposit products.
In addition, Bank Islam’s DCI-i was insured by the Perbadanan Insurans Deposit Malaysia (PIDM).
The DCI-i provided an avenue to generate higher returns from investment in alternative own choice of currencies, tenure and conversion rate.
Currencies with the investor’s Norashikin said investor education and protection through proper disclosure was important.
“It is crucial for investors to fully understand the nature of such investment products and the risks involved before deciding on investment choices,” she added. — Bernama