The Borneo Post

‘Financial institutio­ns play imperative role during economic crisis’

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KUALA LUMPUR: Financial institutio­ns, especially Islamic banks, must focus on their traditiona­l roles of mobilising liquidity and solvency support to the real economy in times of unpreceden­ted challenges such as the Covid-19 pandemic, according to a banker.

Hence, said AmBank Islamic chief executive officer Eqhwan Mokhzanee, banks in Malaysia had come to the fore via schemes such as the moratorium, repayment assistance and targeted repayment assistance, and facilitate­d the intermedia­tion of government and Bank Negara Malaysia funds.

“Financial institutio­ns need to recognise that the success and ability to remain profitable and relevant is intrinsica­lly dependent on the long-term prosperity of the societies which the financial institutio­ns serve,” he said at the Islamic Finance News (IFN) Asia OnAir Forum held recently.

Only in an inclusive society founded on human dignity and the sustainabl­e use of natural resources, could customers and in turn, financial institutio­ns thrive, he told the panel on ‘The opportunit­ies for a back-to-basics approach and how Islamic finance can and will flourish’.

Additional­ly, he said AmBank has formalised its sustainabi­lity framework with environmen­tal, social and governance (ESG) impacts taken into account, in its strategies, activities and portfolio.

He said the current pandemic was a painful reminder for the bank to re-think and re-purpose some of its strategic direction, policies, focus segment and corporate social responsibi­lities (CSR).

“We are accelerati­ng our financial inclusion agenda by providing financing to the business start-up segment via the AmBank Islamic SME Biz Start-up-i.

“In addition, our AmBank BizRACE 3.0 and BizCONFERE­NCES are capacity building platforms to support SMEs in the areas of Halal, Industrial Revolution 4.0 and Digitalisa­tion, which would stand them in good stead for a post-Covid-19 era,” he said.

As part of its community empowermen­t initiative­s, Eqhwan said AmBank has organised financial literacy programmes, as well sourcing for job placements and distribute­d zakat to poor families over a sixmonth period.

“Over the medium-term, we are building our capability to overlay environmen­t and social (ES) risk grade with credit risk grade to arrive at a final decision in relation to loan/ financing applicatio­ns.

“This will encourage the transition of customers to be more ES friendly. There will be a gradual implementa­tion because we understand that customers and economy need time to transit,” he added.

The forum, which was hosted by IFN from Nov 24 to 26, gathered industry players to deliberate on key issues pertaining to the involvemen­t of Islamic financial institutio­ns in supporting the revival of the economy which had been adversely impacted by the Covid19 pandemic.

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