The Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) has published the Value-Based Intermediation (VBI) Full Report 2021. The report highlights the journey and the progress of VBI initiatives from October 2020 until September 2021 among its member financial institutions.
Established in 1995 to promote the Islamic banking system and practice in Malaysia and represent the interest of members locally and abroad, AIBIM currently hosts 27 member banks comprising domestic banks, development financial institutions and locally incorporated foreign banks.
“Islamic financial institutions have contributed significantly in pursuing sustainability efforts domestically. The industry has intermediated RM146.6 billion (US$32.92 billion) in VBI-aligned initiatives, and over RM65.2 million (US$14.73 million) has been distributed under the Islamic social finance tools during the reporting period,” said Mohd Muazzam Mohamed, the chairman of the VBI Community of Practitioners (CoP) and CEO of Bank Islam Malaysia.
In 2021, AIBIM saw a growth in the VBI community with 15 members in the CoP, respecting 57% of total AIBIM members. The CoP also contributed to Bank Negara Malaysia (BNM)’s efforts toward the enhancement of guidance related to climate change and the environment for identified key sectors, issuing the VBI Financing and Investment Assessment Framework (VBIAF).
The first cohort of the sectoral guides on palm oil, renewable energy and energy efficiency was issued in March 2021. The VBIAF sectoral guide working group, led by CoP members, released the consultative documents for the second cohort of the sectoral guides on oil and gas, manufacturing and construction and infrastructure in October 2021.
With an emphasis on Islamic social finance solutions collaboration, AIBIM spearheaded the industry-led ‘myWakaf’ and ‘myZakat’ initiatives during the reporting period. ‘myWakaf’ was a collaborative effort among six Islamic banks, namely Affin Islamic Bank, Bank Islam, Bank Muamalat, Bank Kerjasama Rakyat, Maybank Islamic and RHB Islamic Bank. ‘myZakat’ saw seven Islamic banks collaborate, namely Affin Islamic Bank, AmBank Islamic, Bank Islam, Bank Muamalat, Bank Kerjasama Rakyat, Hong Leong Islamic and RHB Islamic Bank.
Advancing its aspirations into 2022, AIBIM seeks to advance the VBI agenda through the key development areas of disclosure and transparency, common commitment and strategic leadership. Its aspirations are in line with BNM’s five-year Financial Sector Blueprint (2022–2026) strategy and the 12th Malaysia Plan striving for a prosperous, inclusive and sustainable Malaysia.