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Islamic banks urged to roll out new sustainable products
Last update: 04/10/2018

KUALA LUMPUR, Oct 4 (Bernama) – Islamic financial institutions have been urged to start articulating their vision of sustainability clearly and begin rolling out new sustainable products.

Global Islamic Finance Forum 2018 (GIFF 2018) Organising Chairman Rafe Haneef said the banks should accomplish their vision through policies and sustainable conduct.

“Then we have to make sure that our people understand the concept, and train them right from the board level to frontliners and we need to have products to show how banks can promote sustainable activities,” he said during GIFF 2018’s wrapping up session today.

Nine Islamic banks in Malaysia have voluntarily committed to implement value-based intermediation (VBI), a system by which they would channel financing towards activities that will benefit not just their bottom line but also society and the environment – people, planet and prosperity.

Rafe, who is also CIMB Islamic Bhd’s Chief Executive Officer (CEO), noted that several products have already been launched, such as Sustainable Development Goals-linked sukuk and financing for green cars and green homes.

HSBC Amanah Malaysia Bhd CEO Arsalaan Ahmed said the first step should be to create new products to demonstrate what is meant by ‘people, planet and prosperity’ and to train talents to focus beyond profits.

Bank Islam Malaysia Bhd Acting CEO Mohd Muazzam Mohamed said Islamic finance has reached a level where there is now an Islamic equivalent for every conventional banking product and customers have begun to see Islamic products as similar to conventional products.

“We are at a juncture where we need to rethink the differentiation (between Islamic banking and conventional banking) and how Islamic finance can play a role in society. Banks are here to also enrich the society as a whole,” he said, adding that VBI could give a new purpose to and to distinguish Islamic finance.

Bank Negara Malaysia has published a new assessment framework, Strategy Paper on VBI Impact Assessment Framework (VBIAF), and the VBI Scorecard to further promote the sustainability agenda.

The VBIAF will provide guidance on the assessment of financing and investment applications, taking into consideration economic, social and environmental impacts, while the scorecard supports the implementation of performance measurement frame.

-- BERNAMA

 

 


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Source: Bank Negara Malaysia

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