BNM Focuses On Value-based Intermediation To Advance Islamic Financial System This Year
KUALA LUMPUR, March 31 (Bernama) -- Bank Negara Malaysia (BNM) is focusing on strengthening value-based intermediation (VBI) capabilities including in sustainability and climate agenda in Islamic financial system this year.
The central bank also highlighted efforts to foster an enabling environment for impactful innovation, and catalyse economic potential through the halal economy and global opportunities.
“Guided by strategic stewardship and collaboration, BNM remains committed to advancing Malaysia’s Islamic financial ecosystem, to ensure its progressive evolution delivers lasting benefits for all,” it said in its Annual Report 2025 released today.
The central bank said its work centred on three key strategic thrusts in 2025, which are advancing value-based innovation, strengthening the Islamic finance ecosystem, and retaining Malaysia’s position as a global leader in the field.
Under Thrust 1, it said Islamic finance is built on the objectives (maqasid) of Shariah and these objectives build on values such as fairness, equitable wealth distribution and shared responsibility. Hence, VBI puts these values into practice.
“For Islamic financial institutions (IFIs), this means to operate and create positive and lasting impacts instead of just focusing on profit.
“In 2024, IFIs intermediated RM148.6 billion into VBI-aligned activities including for Small and Medium Enterprises (SMEs) and green financing, as well as social finance activities. This shows how VBI places people and the real economy at the centre of financial intermediation,” it said.
In building a stronger impact, BNM introduced initiatives to nurture meaningful innovations to support national priorities.
Among the key innovations are greening halal businesses which empower halal SMEs to adopt sustainable practices (RM15 billion grant); risk sharing fund i-CITA to boost use of risk-sharing instruments by Islamic banks (RM100 million funding); and iTEKAD Protection to enhance financial resilience for microentrepreneurs (RM5 million grant).
Under Thrust 2, BNM adopts a whole‑of‑ecosystem approach to support progressive and inclusive growth, which includes providing a conducive regulatory environment, deepening the Islamic financial market, and ensuring Shariah certainty in Islamic financial practices.
It also continued efforts to futureproof the Shariah ecosystem and this is done through research, talent development and public understanding of Islamic finance.
In addition, under Thrust 3, BNM continues its efforts to position Malaysia as a global thought leader in Islamic finance.
“Our priorities for 2025 include strengthening business linkages, promoting mutual Shariah recognition, accelerating innovation and building global capabilities. Through these efforts, Malaysia aims to build a more connected and progressive global Islamic finance ecosystem,” it added.
The central bank said throughout 2025, Islamic finance deepened its role in serving Malaysians with Islamic financing rising to 48 per cent of total financing, while takaful participation reached 24.5 per cent.
“This growth reflects how Islamic finance continues to meet the changing financing and protection needs of households and SMEs,” it said.
-- BERNAMA