Banking Industry Views Budget 2025 As Positive Step Towards Sustainable, Inclusive Economy

By Karina Imran

KUALA LUMPUR, Oct 18 (Bernama) -- Financial institutions viewed Budget 2025 as a positive step towards achieving a sustainable, inclusive economy while maintaining fiscal responsibility and social justice. 

Bank Islam Malaysia Bhd group chief executive officer (CEO) Datuk Mohd Muazzam Mohamed noted that the budget reinforces the government's commitment to sustainable development and fairness. 

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“We support the government’s RM100 million fund to drive innovation in Islamic finance, which will create products based on true Islamic principles, such as musharakah (risk-sharing) and fair profit distribution, going beyond typical Shariah-compliant options,” he said.

The budget also aligns with Bank Islam’s focus on sustainable finance, he said in a statement. 

Mohd Muazzam expressed encouragement by the government’s continued support for the iTekad initiative. 

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The allocation of RM20 million in matching grants, with RM5 million specifically dedicated to insurance or takaful contributions for micro-entrepreneurs, would further strengthen its efforts to uplift and empower the vital segment of the economy.

Meanwhile, Bank Pembangunan Malaysia Bhd (BPMB) is mandated to allocate up to RM6.4 billion of targeted financing towards high-impact development projects through seven strategic programmes. 

"Of the RM6.4 billion available capital allocated by BPMB, RM1.0 billion will be earmarked for these two focused programmes, namely the bumiputera economic development programme and renewable energy and transition programme," said group CEO Roni Abdulwahab in a separate statement. 

The remaining five of seven BPMB's Budget 2025 programmes are the MADANI development programme, transportation and logistics programme, sustainable development and transition programme, digital infrastructure and high impact sectors programme and capital access programme.

Hong Leong Islamic Bank Bhd also expressed support for various incentives to drive investment and businesses, in line with the Public-Private Partnership (PPP) Master Plan 2030. 

The bank looked forward to playing an active role in supporting the government's vision for a more prosperous and inclusive future, especially in strengthening the financial ecosystem with a focus on renewables and the green economy, it said in a separate statement.

The emphasis on "Raising the Ceiling" through initiatives that promote competitiveness and value-added activities aligns with Hong Leong Bank's focus on supporting businesses and driving innovation in key sectors. 

As for the introduction of a carbon tax on the iron, steel, and energy sectors in Malaysia by 2026, CIMB Group Holdings Bhd group CEO Novan Amirudin lauded the government’s bold move to creatively expand the tax base by introducing carbon and dividend taxes and expanding the scope of sales and service tax. 

"This, alongside the reduction of blanket subsidies and implementation of strategic blueprints, such as the National Energy Transition Roadmap, New Industrial Master Plan 2030 and Johor-Singapore Special Economic Zone, would give the government more firepower to spend as needed to boost our economy, pursue shared prosperity and further spur foreign direct investments," he said in a statement.

Meanwhile, UOB Malaysia's CEO Ng Wei Wei said the tax is a significant step towards incentivising low-carbon technologies. 

In a separate statement, she said the measure, aligned with other international environmental, social and governance regulations, such as the European Union’s carbon border adjustment mechanism, demonstrates the government's firm commitment to decarbonisation. 

"Overall, this comprehensive budget lays a solid foundation for resilience and growth, and UOB Malaysia is committed to supporting Malaysia in its next development phase," she said. 

-- BERNAMA