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Bank Islam Malaysia Bhd is aiming to grow its mobile banking customer base from currently 900,000 users to two million by the year 2019. This is part of the bank’s strategic collaboration with US-based global business and technology consulting company Cognizant to develop fintech products within the network of Bank Islam’s. The banks digital banking segment accounts for less than 5% of its non-fund based income and the bank plans to increase this figure to 10%.
Bank Islam chief executive officer Khairul Kamarudin said the bank expected to roll out at least one fintech product related to retail banking by the second quarter of 2018. The bank planned to develop fintech products targeted at the retail banking and small and medium enterprise segments. “Together with Cognizant, we shall identify suitable fintech products that allow better customer engagement, to be submitted to Bank Negara’s regulatory sandbox,” he said.

Bank Negara Malaysia Governor Datuk Muhammad Ibrahim called on the Islamic finance sector to embrace the financial technological revolution. Technologically-driven applications have spread to every segment of the financial sector, with the number of fintech start-ups having doubled in one year. He noted that the potential impact can be significant, with 10 to 40 % banking revenue possibly at risk by 2025 due to fintech innovations outside banking institutions that are able to offer significant pricing advantage. Bank Negara is reviewing the changes needed to its regulatory framework to ensure that it remains appropriate to manage the risk while encouraging productive innovation.

Bank Negara is reviewing the changes needed for the adoption of financial technology, or fintech.
As Bank Governor Datuk Muhammad Ibrahim said at the Global Islamic Finance Forum the bank wants to ensure that the regulatory framework remains appropriate to manage the risks, while encouraging productive innovation. Fintech has immense potential in Islamic finance. An estimated 10 to 40 % of overall banking revenues could be at risk by 2025 due to fintech innovations, according to a McKinsey research and CB Insights.

Bank Negara Malaysia said it would finalise operating standards for all major Islamic finance contracts by the end of this year, creating the first comprehensive set of practical guidance for the industry.The set of 11 standards will complement existing shariah guidelines issued by Bank Negara, as the regulator aims to address inconsistencies in the use of Islamic contracts. The regulator has sought wide industry feedback and is expected to update the new standards regularly to keep up with changing market practices. Malaysia's current shariah standards are enforceable and have been in place for years, but they are technical rather than practical and still open to interpretation.

The creation of a mega Islamic bank must fulfill the objectives of being able to undertake international business and facilitate cross border financial flows, said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz. She said that such a mega bank must also be able to support international trade and cross border investment activity. She was responding to a question about the license for the proposed mega Islamic bank as a result of a merger between CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd. Dr Zeti said Bank Negara wanted to see the internationalisation and enhancement of Malaysia’s financial and economic connectivity with other countries.

Bank Negara has rejected BIMB Holdings’ proposed move to issue sukuk using Bank Islam Malaysia’s shares as security for the debt, but has allowed the former to acquire the remaining 49% stake in the latter. The central bank has then requested to source and notify the bank on suitable alternative assets as security for the proposed sukuk. An analyst felt the rejection by the central bank would not deter or derail BIMB’s plans to acquire Bank Islam, although it may slow down the purchase process. Last month, BIMB had announced the proposed acquisition of the remaining stake in Bank Islam – 30.5% from the Dubai Financial Group and 18.5% from Lembaga Tabung Haji – for a total cash consideration of US$884.6mil (RM2.87bil). This was to be financed via a two-for-five rights issue of 426.7 million new shares, and a sukuk issuance of up to RM1.47bil.

Talks between BIMB Holdings and the Dubai Financial Group (DFG) over the latter's 30.5% stake in Bank Islam Malaysia have stalled. This is because a long-awaited plan by BIMB to transfer its listing status to Bank Islam is nearing fruition, a prospect DFG finds more attractive than hiving off its interest to pare down debts. The bigger picture, however, is that pilgrim fund Lembaga Tabung Haji, the parent to both BIMB and Bank Islam, is revisiting the idea of a mega Islamic bank involving a merger between BIMB and Bank Muamalat Malaysia. Bank Islam managing director Datuk Seri Zukri Samat said the lender might carry out an initial public offering (IPO) within a year or two.

Bank Negara has given its consent on negotiations between BIMB Holdings Bhd on one side and Dubai Financial Group LLC (DFG) and Lembaga Tabung Haji (LTH) on the other on the topic of BIMB Holdings Bhd's proposal to acquire DFG's stake in Bank Islam Malaysia Bhd. The negotiations are to be competed no later than March 31, 2013. According to BIMB, all partiesfirst need to receive approval from the Minister of Finance before entering into any agreement.

Read more on: http://biz.thestar.com.my/news/story.asp?file=/2012/10/9/business/121436...

The deputy governor of Bank Negara , Datuk Mohd Razif Abd Kadir, passed away at the age of 58 with his family members and friends by his bedside.
Razif joined Bank Negara in 1976 and had several senior positions in the central bank throughout his career.
Razif was also the first chairman of the technical committee of the Islamic Financial Services Board and on the board of the International Centre for Education in Islamic Finance and the board of Bank Negara.

A licence for the bank to create Asia's first multinational Islamic bank will awarded in the third quarter. This has the possibility to increase the ability of syariah-compliant lenders to carry out larger sukuk deals, after global sales more than doubled to US$14.7bil this year.
Five Pillars, an Islamic finance advisory firmfrom Singapore revealed its oppinion that it thinks that the amount may grow to about US$10bil in six to 10 years.

Because of the recent launch by Bank Negara Malaysia of its new Islamic monetary management instrument, the Bank Negara Monetary Notes-Istithmar (BNMN-Istithmar), the attention of the global Islamic capital market is once again on Malaysia.
It seems that at the same time, the Malaysian government has appointed the local Maybank Group, the CIMB Group, Citigroup and HSBC to lead arrange a third global sovereign US dollar sukuk offering.

The Malaysian Islamic banking system (MIBS) acomplished a very important approval by the resilience of the industry and its sustained recovery. Bank Negara Malaysia's 2010 Financial Stability Report shows that the MIBS were still resilient throughout 2010 supported by high capitalization.
Islamic banking institutions were very profitable having a fix income and improving their assets. This profitability allowed the bank to Islamic banking institutions to provide competitive returns to their depositors.

An Islamic finance research body backed by Bank Negara is drafting rules to regulate the use of derivatives to strengthen the industry's risk management framework and repair the perception of poor syariah compliance among banks.
The International Shariah Research Academy for Islamic Finance's (ISRA) rules would prescribe the boundaries that syariah banks have to observe to ensure that the usage of derivatives complies with Islam's ban on gambling.

Malaysia adopted on Jan. 1 a new Shariah Governance Framework (SGF) for Islamic financial institutions (IFIs) that supersedes the Guidelines on the Governance of Shariah Committees of IFIs introduced by Bank Negara Malaysia (BNM).
One prominent international Shariah advisory to the Islamic finance industry, Muhammed Elgari of Saudi Arabia, agrees that Malaysia’s Shariah Governance Framework for IFIs could become a blueprint for other countries to follow.

The nation’s Islamic capital market is seen as being intelligently positioned within the evolving Islamic financial-services industry.
As one of the panel members at the 17th Annual World Islamic Banking Conference 2010 (WIBC 2010) in Manama, Bahrain, Zakariya cited two key factors that must be taken into consideration when tackling legal constraints namely the competency of the civil courts in hearing Islamic banking and finance cases, as well as the adherence to a recognised body such as the Syariah Advisory Council of Bank Negara, or Securities Commission of Malaysia.

Bank Negara Malaysia is offering up to two new Islamic banking licences to foreign firms to set up banks with at least $1 billion of paid-up capital. The industry hopes that this will spur more lending and create bigger Islamic banks that can compete with global lenders.
Bankers say the bid to create a well-capitalised Islamic bank has been fraught with difficulties such as a struggle to raise sufficient capital and disagreement as to where the lender should be located.

Great Eastern Takaful Sdn. Bhd. as commenced business in Malaysia.
Malaysia-based Great Eastern Takaful offers comprehensive takaful, or Islam-compliant insurance products and services, with the aim to achieve 180 million ringgit (US$57.2 million) in total weighted contributions for its first year.
In September, Bank Negara granted new licenses for family takaful to four joint venture entities led by foreign and local insurance and financial companies. The four new family takaful licences were granted to joint ventures led by Great Eastern, ING Groep NV, American International Assurance Bhd. and AMMB Holdings Bhd.

Investors are favoring Malaysia’s Islamic bonds over shorter-term bills as overseas funds increase holdings in the world’s biggest sukuk market,curbing therefore the inflation.
Inflation, cooled in September, enabled Bank Negara to avoid raising borrowing costs in the next few months.

The Islamic Banking and Finance Institute Malaysia (IBFIM) has joined forces with Maldives Islamic Bank to set up the first Islamic bank in Maldives, which aims to be operational next January.
Both parties signed a memorandum of agreement (MoA) yesterday at the Global Islamic Finance Forum.
The MoA will bind both parties to co-develop Islamic finance in the Maldives through an extensive study of Maldives’ legal and banking framework to create a harmonised environment for the growth of Islamic finance.
The signing ceremony was witnessed by Bank Negara deputy governor Datuk Mohd Razif Abd Kadir and IBFIM chairman Datuk Seri Zukri Samat.

Dallah Albaraka Group chairman and founder Shaikh Saleh Abdullah Kamel has been awarded the 2010 Royal Award for Islamic Finance.
Shaikh Saleh was awarded the accolade for his visinary drive, extraordinary leadership and personal commitment in spurring global accessibility of Islamic finance.
The Royal Award is spearheaded by the Malaysia International Islamic Financial Centre and supported by Bank Negara and the Securities Commission.
The seven-member jury comprises eminent individuals, syariah scholars, academicians and Islamic finance practitioners from Asia, Europe, the Middle East and the United States.