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null EPICENTRE April 2023: Malaysia's Islamic banking and takaful industry sustained its growth

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EPICENTRE April 2023: Malaysia's Islamic banking and takaful industry sustained its growth
Malaysia's Islamic banking and takaful industry
sustained its growth
 
The Malaysia’s Islamic banking and takaful industry sustained its growth and gained further share of the overall financial system in 2022. The industry also remained resilient with strong capital buffers to support financial intermediation activities, which has enabled a strong support of funding needs for businesses including micro, small and medium-sized enterprises (SMEs), as well as households and provision of wider financial protection to various communities. Key efforts undertaken include expansion of CAKNA Scheme to ease SMEs’ cash flow management, advancing digitalisation of Islamic financial services, pioneering Islamic transaction-based benchmark rate and promoting the climate and sustainability agenda including through the development of the VBIT Roadmap.

Download the infographic below for a summary on the growth and development of Malaysia’s Islamic banking and takaful industry in 2022 [Access the full chapter on Promoting a Progressive and Inclusive Islamic Financial System in the BNM Annual Report 2022 here]
 
The MIFC Team
Download Infographic
BNM Reports
Featured Articles
Highlights

Islamic finance remains top priority for Malaysia's global gateway
Islamic finance remains a top priority in the Financial Sector Blueprint to strengthen Malaysia's value proposition as an international gateway for Islamic finance. With the growing maturity of the Islamic financial sector domestically, Bank Negara Malaysia (BNM) is also confident that the industry is now well positioned to drive the broader Malaysia as an Islamic Financial Centre (MIFC) agenda.
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Islamic banking industry seeks to grow alternatives to commodity-based shariah contract
Islamic banking activities’ resilience to the risk of extreme supply shocks in global commodity markets will be further enhanced by reducing tawarruq (commodity-based) concentrations through diversification into non-commodity-based Shariah contracts. As the volatility in global commodity prices affects tawarruq transactions in Malaysia, the Islamic banking industry is taking concerted efforts to grow alternative Shariah contracts.
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Insurers and Takaful operators are expected to deploy digital apps in 2023-2024 to improve motor claims experience
BNM expects most general insurers and takaful operators (ITOs) to deploy digital roadside assistance (DRA) solutions via web and mobile applications between 2023 and 2024 to improve customers’ motor claims experience and outcome.
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SC Annual Report

Size of Islamic capital market rose to RM2.32 trillion in 2022
The size of the Islamic capital market (ICM) increased to RM2.32 trillion as at end-2022, from RM2.31 trillion as at end-2021, according to the Securities Commission Malaysia (SC)’s Annual Report 2022. This comprised a total market capitalisation of Shariah-compliant securities of RM1.14 trillion, and total sukuk outstanding amounting to RM1.18 trillion.
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Regulatory Updates

Exposure Draft on Financial Technology Regulatory Sandbox Framework
BNM invites written feedback on the proposals in this exposure draft which sets out the BNM’s proposal to issue a new Financial Technology Regulatory Sandbox Framework policy document, which contains enhancements to the existing policy document. The enhancements are focused at ensuring proportionate regulatory facilitation and improving operational efficiency of the existing sandbox procedures.
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Industry's progress

Islamic Banking and Finance Institute Malaysia (IBFIM) equipped to develop global financial talent
IBFIM provides important tools to develop talent in the Islamic finance industry, to ensure that professionals have the necessary skills and knowledge to meet the growing demand for Islamic finance expertise, while demonstrating socially responsible and ethical values.
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Etiqa becomes the first Insurance and takaful provider in Malaysia to sign on to the United Nations’ Principle for Sustainable Insurance
Etiqa is the first insurance and takaful company in Malaysia to become a signatory of the United Nations’ Principle for Sustainable Insurance (UN PSI) under the United Nations Environment Programme Finance Initiative (UNEP FI). Etiqa will incorporate the four Principles for Sustainable Insurance, as presented by the United Nations in its business strategy.
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