“VBI is very much a game changer in Islamic finance as it gives equal weight to both economic value creation and ethical values.”
MOHD ZABIDI MD NOR, Bank Negara Islamic banking and takaful director
KUALA LUMPUR: Bank Negara Malaysia will launch the valuebased intermediation (VBI) initiative scorecard at the Global Islamic Finance Forum 2018 in October.
Bank Negara Islamic banking and takaful director Mohd Zabidi Md Nor said the scorecard was being finalised with the help of banks.
“VBI is very much a game changer in Islamic finance as it gives equal weight to both economic value creation and ethical values,” he said at the Standard Chartered Saadiq forum on “VBI at the core of sustainable banking”, here, yesterday.
“We are developing the scorecard with the help of the VBI community of practitioners. It is important that we have the input of the practitioners so that the scorecard stays practical and achievable,” he said.
The nine Islamic banking institutions in the VBI community of practitioners are Bank Islam, Bank Muamalat, CIMB Islamic, Agrobank, HSBC Amanah, Maybank Islamic, AmBank Islamic, Alliance Islamic and Saadiq.
“All the banks are working towards getting a good score,” said Zabidi.
He said the scorecard comprised quantitative and qualitative elements that measured different segments.
“Quantitative elements single out the elements of financing that focus on the triple bottom line, namely social, environmental (or ecological) and financial,” said Zabidi.
Meanwhile, Employees Provident Fund (EPF) equity research head Nor Azam Yahya said EPF was leading by example in both VBI and social and corporate governance.
“EPF is a majority shareholder in a lot of public-listed companies in Malaysia and it has been our practice to incorporate transparency in integrated financial reporting in these companies.
“However, VBI is beyond integrated financial reporting and a lot of work has to be done with public-listed companies and smaller-cap companies. EPF is leading by example and we hope that the trickle-down effect will take place from the bigger players to the smaller players.”
The adoption of VBI was announced by the central bank late last year and has gained traction among industry players.