Bank Negara Malaysia

IBs want property lending rule scrapped

Investment banks (IBs) want Bank Negara Malaysia to withdraw the property lending guideline, which was introduced in 1997. It stipulates that a bank’s credit facilities should not exceed 20% of its total outstanding loan base. Compliance with this requirement is calculated on a quarterly basis. For IBs, the guideline mainly affects their underwriting business. They think the guideline is outdated, especially since there are already other macroprudential measures introduced by Bank Negara in recent years. The Malaysian Investment Banking Association (MIBA) had highlighted the issues affecting the industry to Bank Negara. It is understood that the central bank is currently reviewing the guideline.

#PNB expanding #Islamic #finance agenda: Wahid Omar

Permodalan Nasional BHD is pushing for much bigger Islamic financial activities in order to turn Malaysia into a centre of global Islamic banking. In an interview to mark his one-year stint in the country’s largest unit trust fund, group chairman Tan Sri Abdul Wahid Omar explains how PNB and its strategic companies will intensify efforts to boost syariah-based investment and financing products.
Regarding the Islamic finance agenda being so important to PNB it was asked, if it is tied to the government’s objective of making Malaysia the Islamic financial hub of the world.
Mr. Tan Sri Abdul Wahid Omar answered: „Indeed, if you look at the aspirations of our unitholders, they want syariah-compliant unit trust funds. I think this was why back in 2008, there was a fatwa that investments made in Amanah Saham Nasional Bhd were permissible. This fatwa was issued at the national level and 10 states adopted the fatwa, excluding Selangor and Penang. Over the past year, we had been engaging with the Selangor Mufti Department and based on those engagements, they revised their fatwa positively. So starting from April, investments in ASNB funds are “harus”.

World Bank sees massive potential in #green #sukuk

The #Malaysian company Tadau Energy became the first entity in the world to issue a green sukuk. Called Green SRI Sukuk Tadau, the RM250 million Sustainable Responsible Investment (SRI) syariah-compliant bond holds a tenure of up to 16 years. RAM Rating Services assigned it a long-term rating of "AA3". The framework underlying the green sukuk’s debut is the result of a collaboration between Bank Negara Malaysia, the Securities Commission (SC) and the World Bank. World Bank country manager Faris Hadad-Zervos called the issuance of the green sukuk a historic event, not just for Malaysia but for the whole world. Faris stressed the creation of the framework was key in making the world’s first SRI sukuk a reality. World Bank financial specialist Jose De Luna Martinez said the Tadau sukuk would potentially lead Malaysia to be a green sukuk hub of the Asean region.

#Malaysia’s First #Green #Sukuk Under Securities Commission Malaysia’s Sustainable Responsible Investment Sukuk

Securities Commission Malaysia (SC) announced the issuance of Malaysia’s first green sukuk under its Sustainable & Responsible Investment (SRI) Sukuk framework. To complement SRI Sukuk framework, several incentives are in place to attract green issuers. They include tax deduction until year of assessment 2020 on issuance costs; tax incentives for green technology activities in energy, transportation, building, waste management and supporting services; financing incentives under the Green Technology Financing Scheme (GTFS) with total funds allocation of RM5 billion until 2022. To be eligible for tax deductions, issuers must ensure that proceeds are used to fund SRI projects in the natural resources, renewable energy and/or energy efficiency sectors. The framework underlying this first green sukuk is the result of collaboration between SC, Bank Negara Malaysia and the World Bank Group to introduce innovative financial instruments to tackle global infrastructure needs and green financing.

#Innovation in #Islamic #finance

Although Malaysia is a leader in Islamic finance research, very few of the research papers published have translated into feasible innovations, until recently. To help push the sector forward and bring the research and ideas to fruition, International Centre for Education in Islamic Finance, with the support of Bank Negara Malaysia, the Association of Islamic Banking Institutions Malaysia and the Malaysian Takaful Association, recently held the Islamic Finance InnoFest 2016. For this festival, INCEIF accepted idea submissions from all over the world, including Japan, Australia and Pakistan, to promote inclusiveness.

“We believe that to really push for innovation, we cannot be stuck in a silo. That is why it is not limited to only Malaysians,” says Associate Professor Dr Baharom Abdul Hamid, director at INCEIF’s Centre of Research and Publication and InnoFest chairman.

Spotlight on #careers of #women in #Islamic #finance

Next week’s influential World Islamic Banking Conference in Bahrain will see a lot of interesting and highly relevant keynotes, debates and panels, but also a premiere that highlights a phenomenon not yet clearly studied in the industry: The role of women in Islamic finance and the opportunities that arise for them.
Simply Sharia Human Capital, a London-based recruitment and training center solely dedicated to Islamic finance, at the conference will unveil a report called “Women in Islamic Finance & Islamic Economy: Unlocking Talent,” one of the rare studies that actually look into roles, careers and achievements of women in the Islamic finance industry, and the job opportunities it holds for female career seekers from an educational perspective.

Bank Negara governor: Islamic finance key segment in financial system

In #Malaysia Bank Negara governor Datuk Muhammad Ibrahim said Islamic banking assets made up 27% of the total banking system, surpassing Bank Negara’s Financial Sector Masterplan. He said that there were 27 takaful players offering more than 100 financial products now compared with fewer than four Islamic banks and takaful players before year 2000. He added that the penetration rate for takaful now stood at 14.8% of the population, indicating growing acceptance of takaful products. On the launch of the Educator’s Manual on Shariah Standard Murabahah, Muhammad said that the manual was aimed to act as a comprehensive teaching guide to enhance the Islamic finance syllabus. It was jointly developed by Bank Negara in collaboration with the International Shari’ah Research Academy for Islamic Finance and IBFIM.

Rise in Islamic banking assets

In #Malaysia islamic banking assets now stand at 27% of the total banking system, surpassing the targeted 20% under Bank Negara Malaysia’s financial sector master plan. Bank Negara governor Datuk Muhammad Ibrahim said there were now 27 players offering more than 100 financial products compared with fewer than four Islamic banks and takaful players before 2000. The Educator’s Manual on Shariah and Practical Operational Standards was launched on Tuesday to enhance the quality of education. Of the 14 syariah standards that are being developed by Bank Negara, Murabahah is the first series in the educator’s manual. The manual for other contracts will be developed gradually.

#Indonesia #sukuk beats #Malaysia in attracting Brexit-haven funds

Indonesia's Islamic bond yields have fallen faster than Malaysia's in the past three months, as the nation's higher-yielding notes do better at attracting foreign investors. Yields on rupiah sukuk due 2019 slid 37 basis points in the period, compared with 24 basis points for equivalent paper in Malaysia. Indonesia's three-year Islamic bonds pay 7.16%, while those in Malaysia yield 3.26%. Indonesian bonds are the best performers in South-east Asia this year after the government passed a tax amnesty bill on undeclared income held overseas. Bank Negara Malaysia lowered borrowing costs for oil, as well as its projection for consumer prices to 2%-3% in 2016, from 2.5%-3.5 %. Currently both nation's currencies are seeing a revival.

Zeti unlikely to stay for another term

Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz is likely to leave when her term expires in April. Zeti said she had not received any request to stay on amid the current market volatility, a scenario which had fuelled speculation that her contract may be extended. She stressed that it was "very unlikely" for her term to be extended again, as the succession process is already underway. Zeti, who has served as governor for 16 years, was however tight-lipped on who her successor would be, saying she is not at liberty to discuss the matter. She, however, said the central bank will remain independent even with the appointment of a new governor. Zeti stressed that a politician should not be appointed as governor of the central bank.

MAA submits application to BNM to sell takaful operation

MAA Group Bhd, Solidarity Group Holdings BSC and Zurich Insurance Co Ltd (Zurich) has jointly submitted an application to Bank Negara Malaysia (BNM), for the sale of MAA Takaful Bhd stakes. In a filing with Bursa Malaysia, MAA Group said the application was for the Minister of Finance's approval, pursuant to the Islamic Financial Services Act 2013. The group did not reveal any detail of the divestment. MAA Takaful is a joint venture between MAA Group and Solidarity Company BSC (C) of Bahrain, of which MAA controlled a 75% equity stake, while the remaining 25% is controlled by Solidarity Group. BNM had on June 15 said it granted its greenlight for MAA Group to commence negotiations with Zurich for disposal of its 75% stake in its takaful insurance arm.

SEDCO Capital showcases local know-how and global reach

Islamic finance seen as a real point of convergence between the East and the West. Hasan AlJabri, CEO of SEDCO Capital participated in the Global Ethical Finance Forum which was hosted by the Scottish Government and in cooperation with the UK Islamic Finance Council.
The forum which took place in Edinburgh, Scotland, brought together thought leaders and executives from the ethical finance industry to ‘discuss untapped opportunities and spur convergence and collaboration’. The forum was officially opened by Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia and HRH Emir Muhammad Sanusi II, Emir of Kano.

Under the title “Growing the global ethical finance industry through collaboration and convergence”, AlJabri pointed that although there are many different forms of responsible investments, Environmental, Social and Governance (ESG), Socially Responsible Investing (SRI), and Islamic Finance, they all emerge from concern about the social and environmental consequences of investment practices, and a desire to ensure that investors make a positive contribution to the societies in which they operate to create sustainable economic development.

Merger talks with MBSB going on smoothly, says Bank Muamalat Chairman

The merger negotiations between Bank Muamalat and Malaysia Building Society Bhd (MBSB) is going on very well and smoothly, says Bank Muamalat Chairman Tan Sri Dr Munir Majid. He said there was no conclusion yet but the progress, thus far, was good. "We will still have to report to Bank Negara on what we have achieved by year-end, after which we will proceed to the next stage," he said at a 'Charity Free Market - Back to School' programme, organised by the bank.

Bank Negara Malaysia gave its approval to Bank Muamalat and MBSB to begin merger talks on Sept 30, a move that could pave the way for the creation of the countrys biggest standalone Islamic bank.
The central bank required the merger negotiations to be finalised within three months from the date of the approval. It was reported earlier that assuming the merger talks go through, the combined asset size of the two lenders is estimated to be over RM60 billion, higher than the RM54 billion asset size of BIMB Holdings Bhd, the holding company of Bank Islam Malaysia Bhd, Malaysias largest full-fledged Islamic bank.

Wanted – Islamic financial specialists

Rapid growth in Islamic finance in recent years is pushing up demand for more experts in the field, with the Financial Accreditation Agency (FAA) identifying five key areas in which specialists are urgently needed.
However, programmes offered by local universities now are too generic and provide only a broad-based education on Islamic finance, noted FAA chief executive Dr Amat Taap Mashor in an interview with The Edge Financial Daily.
The industry and its future growth, at the very least, require experts that are specialised in compliance, risk management, governance, audit and the syariah principles guiding all these areas of expertise, he said.
“What is needed now are specialised areas of studies. Currently, if someone wants to specialise in risk management for Islamic finance, the [local] universities might offer only one class on risk management. How is the student supposed to develop the depth of knowledge needed [in] Islamic finance?
“Without a depth of knowledge in syariah principles, how can you design a syariah-compliant product?” asked Amat.

Central Bank Malaysia - Concept Papers: Ijarah and Istisna' for public consultation

Bank Negara Malaysia is issuing two concept papers on Ijarah and Istisna' for public consultation. The concept paper aims to seek feedback from members of the public, Islamic financial institutions and related stakeholders on the Shariah and operational requirements for the application of ijarah and istisna' contracts.

Background
As part of the initiatives to strengthen the Shariah-compliance practices among Islamic financial institutions (IFIs), Bank Negara Malaysia is developing a Shariah-based regulatory policy with the objective to provide a comprehensive guidance to the lslamic financial industry to enhance end-to-end compliance with Shariah and therefore, ensure the integrity and sustainability of the IFI.

Two-year transition for Islamic banks to reclassify deposits

Islamic banks are required to reclassify their deposits into Islamic deposits and investment accounts under the Islamic Financial Services Act 2013 (IFSA). To do so, they are given a two-year transition period until June 30, 2015. Bank Negara Malaysia (BNM) said Islamic banking institutions will engage with their customers in providing information and clarification on the differences between the Islamic deposit and investment account products as well as the options available to them to either retain their placements in Islamic deposit or migrate to investment accounts. During the transition period, all lslamic deposits accepted under IBA will continue to be protected by Perbadanan Insurans Deposit Malaysia while the Islamic banks will also ensure that the customers' rights are protected.

New BNM proposals to boost insurance sector growth

Bank Negara Malaysia’s (BNM) recently announced concept paper on life insurance and family takaful (LI and FT) may be the insurance sector’s re-rating catalyst. The proposals made in the paper focus on ensuring sustainable operating costs, enhancing disclosure and improving policyholders’ value proposition, which should collectively boost penetration, especially in the mass market. Key measures in the recent proposals include the introduction of the minimum allocation rate to replace commission/operating cost limits on investment-linked products, promoting distribution channels and encouraging greater product transparency with enhanced disclosure requirements and web aggregators. The outcome is considered a win-win for customers and insurers.

BIMB will use funds for sukuk security

BIMB Holdings Bhd announced it has notified Bank Negara Malaysia that the security for its proposed sukuk will only comprise the legal assignment over the proceeds from the exercise of its proposed warrants. It includes the legal assignment and charge over a sinking fund account into which all proceeds from the exercise of the warrants will be deposited. The exchange has approved the listing of new shares, warrants and rights in relation to its proposed purchase of the remaining 49% stake in Bank Islam.

Bank Negara extends deadline over Bank Islam deal to end-July

Bank Negara Malaysia (BNM) has extended the deadline for the negotiations among BIMB Holdings Bhd, Dubai Financial Group LLC and Lembaga Tabung Haji (LTH) over the Bank Islam Malaysia Bhd stake to July 31. Following the extensión of the deadline, a formal approval shall be sought for the proposed acquisition as mutually agreed among the parties. BIMB already owns 51% in Bank Islam. A 30.5% stake is with the Dubai Financial Group (DFG) while 18.5% is held by Lembaga Tabung Haji (LTH). BIMB is seeking to purchase LTH's stake in Bank Islam. LTH also owns a 51.5% stake in BIMB. BIMB may have to fork out RM2.7bil to own 100% of its unlisted banking unit Bank Islam.

Islamic finance works in fostering sustainable economic growth: Zeti

Malaysian's central bank governor has claimd that Islamic finance will contribute to the global agenda of developing sustainable growth. Providing financial services that add value to the real economy is the focal point of Islamic finance and tenets.

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