BNM releases strategy paper on VBI

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KUALA LUMPUR: Bank Negara Malaysia (BNM), in collaboration with the Islamic finance industry, has released a strategy paper on Value-based Intermediation (VBI) to articulate strategies to strengthen the roles and impact of Islamic banking institutions (IBIs) towards a sustainable financial ecosystem.

The central bank said the intended outcomes of VBI were broadly similar to the objectives set by frameworks such as the Environmental, Social and Corporate Governance (ESG), Sustainable, Responsible, Impact Investing (SRI) and ethical finance.

However, it said VBI was rooted in syariah, which determined its underlying values, moral compass and priorities.

“With the adoption of VBI, practitioners will need to consider the impact of their activities and actions not only to financial consumers but a wider range of stakeholders,” BNM said in a statement yesterday.

The central bank said the strategies were aimed at promoting the application of VBI practices which would lead to an improved suite of products and services offered by IBIs – for better facilitation of entrepreneurship, community well-being, sustainable environment and economic growth, without compromising on shareholders’ returns.

“These strategies are expected to be adopted and implemented based on each IBI’s readiness,” it said.

The central bank added that it invited constructive feedback from interested parties to further enrich the content of the strategy paper which can be emailed to [email protected]. — Bernama