BnM’s approach to vBi adoption is practical — Banker
KUALA LUMPUR: Bank Negara Malaysia (BNM) is taking a practical approach by allowing Islamic banks in Malaysia to adopt valuebased intermediation (VBI) on a voluntary basis, said AmBank Islamic Bhd chief executive officer, Eqhwan Mokhzanee.
The way Islamic banks were set up traditionally was not suited to the environmental and social considerations but more on credit ability and financial aspects of customers, he said.
“When we are not ready to fully embrace VBI, if it was prescribed and made mandatory, it could cause more harm than good. So the BNM approach, by making it voluntary, is the right approach.
“Along the way, after we have built capacity and created more awareness among customers and stakeholders and if embracement is still lacking and impact is minimal, then the approach should be revisited,“he told reporters on the sidelines of the Global Islamic Finance Forum 2018 themed “ValueBased Intermediation: Beyond Profit” yesterday.
According to a BNM strategy paper, VBI aims to deliver the intended outcomes of shariah (Islamic law) through practices, conduct and offerings that generate sustainable impact to the economy, community and environment, hence promoting a more holistic observation of shariah.
Eqhwan said since VBI was a good concept, people should voluntarily embrace it.
However, he added that if something good was forced down, the eventual outcome could not be as positive as it should be.
Historically, Islamic banks were shariah- compliant institutions offering products and services that utilised shariah for legitimacy, he noted.
By adopting VBI, they would be truly embracing, he said.
Eqhwan said the intended outcome of shariah Islamic finance was not only about giving shariah compliance products and services but also making sure they were provided to shariahcompliant users or sectors and the outcome would bring a positive impact rather than negatively affecting the society and environment.
One of the more important things to look at in adopting VBI concept, he said, was capacity building in terms of talents, assessment capabilities, policies and processes. — Bernama