KUALA LUMPUR: The 2025 Budget allocation of RM100 million to promote new Islamic finance innovations signals a strong commitment by the government to foster financial innovation, said Bank Negara Malaysia governor Datuk Seri Abdul Rasheed Ghaffour.
He urged the industry to seize the opportunity to innovate through risk- sharing product offerings, particularly to fund climate transition and food security initiatives.
Abdul Rasheed was speaking at the launch of 19th Kuala Lumpur Islamic Finance Forum 2024 (KLIFF 2024) here today.
KLIFF 2024's key highlights include the 19th KLIFF Main Forum from today until tomorrow, and the 17th KLIFF Shariah Forum, or Muzakarah Penasihat Syariah Kewangan Islam 2024, on Nov 7.
The forum aims to serve as a platform for debate, discourse, and solutions based on knowledge and experience, while enhancing branding appeal and reaching out to Islamic finance leaders in the Asia Pacific region.
According to Abdul Rasheed, Islamic finance holds substantial potential to revitalise the economy through three core principles including Maqasid Shariah, innovation, and global integration.
He described these principles as embedding Maqasid Shariah in economic and sustainable reforms, advancing innovation for value-based solutions, and enhancing global integration for mutual development and shared prosperity.
"I commend the Malaysian Islamic finance industry for leaping forward more than half a decade ago to embrace Value-based Intermediation (VBI).
Stronger implementation of VBI requires concerted efforts and holistic alignment across all key stakeholders.
"In particular, shareholder stewardship is vital to ensure the transformative impacts of value-based finance are widely seen and felt," he said.
On global integration, Abdul Rasheed said the rapid expansion of the global Islamic finance market is attracting an increasing number of international investors and driving economic growth across multiple regions, including emerging markets such as the Philippines, Central Asia and North Asia.
Thus, Islamic finance players could expand their footprint and global outreach, encouraging greater cross-border investments and collaboration by capitalising on these opportunities, he added.