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Measures to assist in managing the impact of Covid-19 outbreak in Malaysia

In this issue, we focus on efforts of financial sector regulators and players in supporting those affected by the novel Coronavirus (Covid-19) outbreak in Malaysia. The effects of the outbreak are felt in various aspects of the economy and society. To assist individuals, small and medium-sized enterprises (SMEs) and corporations in managing the impact of the Covid-19 outbreak, financial sector regulators and players - banks, insurance companies and takaful operators - have announced several measures including deferment of loan or financing repayment, enhanced financing facilities, additional insurance or takaful coverage and rebate of 50% of the annual listing fees. A new initiative on social finance programme, known as ‘iTekad’ has also been launched to enable micro-entrepreneurs from the lower income group (B40) to generate sustainable income and improve financial resilience. For more information on iTekad, kindly download the infographic. On the global front, several relief and stimulus packages have also been announced by multilateral banks and financial regulators in other countries to assist financial systems and economies to cope with the situation.

In conjunction with the publication of Bank Negara Malaysia's 2019 Annual Report 2019 and Financial Stability Review for 2nd half of 2019, in this issue, we have a dedicated section on the publication that consists of an infographic on 'Performance of Malaysia’s Islamic banking and Takaful in 2019' and feature articles on 'Transforming the Economy and Society through Islamic Finance', 'Managing Commodity Trading Risks in Islamic Financial Transaction' and ‘Multi-year Solvency Test for Banks and Insurers’. The infographic and articles can be downloaded for your reading pleasure over the weekend.


Stay safe,
The MIFC Team
 
Download Infographic
Press Release

Relief measures cushion credit profile on Islamic banks

RAM maintains a stable outlook on the Malaysian Islamic banking sector on account of the industry’s sturdy fundamentals. Taking into account the expectation of a steep moderation of economic growth, the Islamic financing growth is expected to decelerate to below 5% in fiscal 2020.
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Press Release

Takaful operators to provide hospitalisation coverage/treatment due to Covid-19

Takaful operators will provide hospitalisation coverage/treatment due to Covid-19 to their certificate holders even though a majority of the medical certificates carry an exclusion on communicable diseases requiring quarantine by law.
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Press Release

Measures to assist individuals, SMEs and corporates affected by the Covid-19

Bank Negara Malaysia announced a number of regulatory and supervisory measures in support of efforts by banking institutions to assist individuals, small and medium-sized enterprises (SMEs) and corporations to manage the impact of the Covid-19 outbreak. The measures include deferment and restructuring of loans/financing facilities, ample liquidity conditions and additional supervisory and prudential measures.
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Press Release

Additional measures to further support SMESs and individuals affected by the Covid-19 outbreak

Bank Negara Malaysia announced additional measures to support SMEs and individuals, including enhancements to financing facilities to assist affected SMEs, safeguard jobs and support growth, programme to support the B40 segment in generating sustainable income and achieve financial resilience (iTEKAD) and relief measures for affected policyholders and takaful participants.
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News

Banks offer non-compounding interest on loans

Several conventional banks in Malaysia have announced that they will not be compounding interest or profit for their retail and SME customers during the six-month moratorium period. All Islamic financing facilities’ profit rates are already not compounded in line with Shariah principles.
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Press Release

SC announces further relief measures for capital market licensed entities

The Securities Commission Malaysia (SC) announced further relief measures, which aim to ease the cost burden of capital market participants offer relief in the short term and support for longer term recovery.
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Press Release

Bursa Malaysia announces additional relief measures for capital market players

Bursa Malaysia announced a new set of relief measures targeted to a broader group of participants within the capital market. Among others, the relief measures include rebate of 50% of the annual listing fees for the year 2020, automatic 1-month extension to submit financial statements and greater flexibility for brokers to manage margin accounts.
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Highlights on Bank Negara Malaysia (BNM) Annual Report 2019 and Financial Stability Review for 2nd Half 2019
Download Infographic
Feature Articles 

Transforming the economy and society through Islamic finance

Islamic finance in Malaysia has become well-entrenched in the country's dual financial system. Both conventional and Islamic finance systems remain important enablers of sustainable growth in the economy. The Islamic financial system has undergone significant transformation from its modest beginning. In the early years , the system was focused on providing basic banking services to promote financial inclusion among Muslims. It now has evolved into a comprehensive systems that provides diverse solutions for households, businesses and government. 
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Managing commodity trading risks in Islamic financial transaction

A central tenet if Islamic finance is the direct link between financial transactions and the real economy. Shariah requires all financial transactions to be underpinned by an asset to justify profit generation. The assets must be specifically identified to avoid elements of uncertainty (gharar) in the transaction. In facilitating such transactions, a wide spectrum of underlying assets can be used by Islamic financial institutions (IFIs). 
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Multi-year solvency stress test for banks and insurers

The Bank’s multi-year solvency stress test exercise examines the potential impact of prolonged financial and macroeconomic strains on the resilience of individual banks and insurers, and the overall financial system. At the end of the four-year stress horizon (2020-2023), the banking system’s capital ratios remained above regulatory minima. Similarly, the insurance sector is able to maintain capital adequacy ratios (CAR) above the regulatory minima.
Download article
To download  the publication of Bank Negara Malaysia’s Annual Report 2019, Economic and Monetary Review 2019 and Financial Stability Review for Second Half 2019, please visit www.bnm.gov.my/ar2019
Islamic Finance Library
Islamic Finance Dashboard
Calendar of Events
APEC Gig Economy Challenge
Date: 18 March 2020 - 31 December 2020
Venue: Kuala Lumpur

For more information, please click here.
Global News on Covid-19
  1. IsDB launched USD2 billion Covid-19 response package
  2. Autoriti Monetari Brunei Darussalam: Banking Sector Introduces Interim Measures
  3. State Bank of Pakistan announces measures to address the economic and health challenges
  4. SAMA pledges financial support for those hit by coronavirus crisis
  5. Kuwait’s banks defer consumer, SME loans repayments for six months amid coronavirus pandemic
  6. UAE banks support customers impacted by coronavirus
  7. Islamic trade finance body ITFC launches USD850 million coronavirus financing
  8. Indonesia imposes large-scale social restrictions, introduces 405.1 tln rupiah financial crisis plan
  9. USD97bln stimulus packages erupt across GCC states
  10. Sukuk issuance to remain stable at USD180 billion in 2020 despite Covid-19 threat
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