BNM Governor Hopes Islamic Finance Becomes The Driver For Greener Economy

LONDON, Sept 11 (Bernama) -- Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour has expressed hope for wider acceptance and use of Islamic finance as a vehicle to drive efforts to transition to a greener economy. 

Speaking to more than 140 participants at the Malaysia International Islamic Financial Centre (MIFC)-UK Business Forum 2024 here today, Abdul Rasheed said principles of justice, inclusivity, resilience, and sustainability are central to Islamic finance, values that are critical in today’s economic landscape.

"We are seeing flows into high-quality investments that are in line with our investment aspirations, which include uplifting Malaysia’s economic complexity, enabling high-value-added activities, generating high-income jobs and creating strong economic linkages, both domestically and globally. 

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"We also see sustainable finance and Islamic finance as important levers to address the economy’s funding needs as well as to serve as an international gateway for Asia and the Organisation of Islamic Cooperation (OIC) markets with respect to Shariah-compliant investments,” he said.

The business forum, which aims to strengthen the Malaysia-UK partnership in fostering cross-border investments, particularly in the green sector, was jointly organised by BNM and MIFC Leadership Council (MLC) with the Islamic Finance Council United Kingdom (UKIFC), TheCityUK, and UK Islamic Finance - Halal Economy Hybrid Group as supporting partners. 

Abdul Rasheed explained that Islamic finance in Malaysia is anchored by value-based intermediation (VBI) strategies and the sustainable and responsible investment (SRI) framework.

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“The Central Bank of Malaysia and Securities Commission Malaysia are actively working to unlock the full potential of new growth sectors by integrating Islamic finance with sustainable and green finance initiatives.

"These developments build upon the progress made over four decades since the introduction of Islamic finance in Malaysia in developing a progressive, inclusive and resilient financial ecosystem,” he added.

Further in his address, the governor also hopes that the forum will be able to achieve stronger cross-border investment linkages that serve as catalysts for economic growth and investment opportunities.

Meanwhile, BNM, in its statement, said the MIFC-UK Business Forum would serve as a catalyst to advance the partnership between MLC and UKIFC to implement the memorandum of cooperation signed at the Global Forum on Islamic Economics and Finance in May 2024. 

“The collaboration is envisioned to be mutually reinforcing for the two countries. This can be achieved by leveraging both Malaysia as the global gateway for Islamic finance opportunities for Asia and the OIC markets, and the UK as a global financial centre,” it said. 

-- BERNAMA