By NG MIN SHEN
Bank Negara Malaysia (BNM) has released a strategy paper on value-based intermediation (VBI) in collaboration with the local Islamic nance industry that outlines the guidance for implementing VBI in the country.
A BNM statement noted that the paper would articulate strategies to strengthen the roles and impact of Islamic banking institutions towards a sustainable financial ecosystem.
The strategies promote the application of VBI practices, which will lead to an improved suite of products and services offered by Islamic banking institutions, for better facilitation of entrepreneurship, community wellbeing, sustainable environment and economic growth, without compromising on shareholders’ returns.
The intended outcomes of VBI are broadly similar to the objectives set by structures such as the environmental, social and corporate governance, sustainable, responsible, impact investing and ethical finance frameworks.
“However, VBI is rooted in Shariah, which determines its underlying values, moral compass and priorities. With the adoption of VBI, practitioners will need to consider the impact of their activities and actions not only to financial consumers but to a wider range of stakeholders,” the statement read.
It added that these strategies are expected to be adopted and implemented based on the readiness of each Islamic banking group.
The central bank is inviting constructive feedback from interested parties to further enrich the content of the strategy paper.
Written feedback can be submitted by Aug 31, 2017 to [email protected].
For further details, the full strategy paper is available on BNM’s official website.