Islamic Finance, Consumer Protection, and Financial Stability

Author/Editor:

Inutu Lukonga

Publication Date:

May 18, 2015

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.

Series:

Working Paper No. 2015/107

Subject:

Banking Deposit insurance Financial crises Financial services Islamic banking Islamic finance Legal support in revenue administration Revenue administration

English

Publication Date:

May 18, 2015

ISBN/ISSN:

9781513515106/1018-5941

Stock No:

WPIEA2015107

Pages:

39

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