Bank Negara Malaysia To Adopt MYOR-i As Mandatory Islamic Benchmark Rate From July 2027

KUALA LUMPUR, Oct 13 (Bernama) -- Bank Negara Malaysia (BNM) will adopt the Malaysian Islamic Overnight Rate (MYOR-i) as the mandatory reference rate for all Islamic financial products beginning July 1, 2027, marking a major structural reform in the country’s Islamic finance landscape.

Governor Datuk Seri Abdul Rasheed Ghaffour said MYOR-i, the world’s first transaction-based Islamic benchmark rate, would bring transparency, consistency and shariah alignment to the heart of Islamic finance.

“This is not just a technical adjustment; it is a structural transformation,” he said in his opening address at the Global Islamic Finance Forum (GIFF) 2025, which was launched by Prime Minister Datuk Seri Anwar Ibrahim here today.

Abdul Rasheed said the move forms part of five key developments that Malaysia is pursuing to advance its Islamic financial ecosystem, aimed at enhancing risk-sharing structures, promoting inclusive development, deepening global connectivity and building talent.

He said the first initiative is to encourage impactful re-engineering of finance by expanding the use of risk-sharing structures such as musharakah and mudarabah, offering distinct risk-reward propositions beyond transactional debt.

“The roll-out of i-CITA last month, supported by a RM100 million fund from the government to encourage risk sharing innovation, aims to support more diverse applications of shariah contracts for viable projects that bring tangible benefits to Malaysia.

“To complement this initiative, we are actively reviewing the shariah contracts and investment account policies to provide a more conducive regulatory environment for investment intermediation,” he said.

The second initiative focuses on redefining inclusive growth through the integration of Islamic social finance with mainstream financial systems, he said, citing the iTEKAD programme -- powered by blended finance -- as a successful example of how Islamic finance can be mobilised to uplift communities by increasing employment and skills.

Abdul Rasheed noted that the programme’s expansion for financial protection, supported by a RM5 million government matching grant for takaful contributions, demonstrates the tangible impact of such collaboration between banks, takaful operators and development partners.

Meanwhile, the Governor also urged that Malaysia’s Islamic finance move from selected success to systemic transformation, noting that “the tools are in place, partnerships are forming, and the time is at ease to accelerate now.

The third initiative is Malaysia’s effort to position Islamic finance at the forefront of two global growth frontiers - the halal economy and sustainable finance.

“These are not niche markets - they are trillion-dollar opportunities waiting to be unlocked,” he added.

Through the Malaysia International Islamic Financial Centre (MIFC) Leadership Council, the country has laid strategic groundwork for global connectivity, he said.

“Stronger execution by industry is now paramount. That is why we are supportive of the formation of the MIFC Business Network (MBN) as the next phase of MIFC Leadership Council transition,” he said.

Abdul Rasheed further said that nine industry players from banking, takaful, capital markets and ancillary services have committed as founding members of MBN, and invitations for wider participation will be announced soon.

The fifth and final frontier, which follows the new benchmark rate introduction, involves strengthening the talent pipeline and innovation ecosystem.

“Institutions like INCEIF University are evolving beyond education into engines of innovation, embedding the Maqasid Shariah into economic and policy frameworks.

“Regionally, IBFIM is scaling up capacity through the enhanced Associate Qualification in Islamic Finance (AQIF) now tailored for ASEAN markets including Brunei, Indonesia, the Philippines and Singapore,” he said.

He added: “The need is clear - if we want Islamic finance to lead, we must invest to build and nurture talent that can imagine, design and deliver its future.”

Abdul Rasheed also highlighted that the global Islamic finance industry is projected to surpass US$9.7 trillion (US$1=RM4.23) by 2029, and stressed that the journey cannot be defined by scale alone but must be underpinned by substance, leadership and innovation with purpose.

-- BERNAMA