BNM Finalizes Paper on Value-Based Intermediation in Islamic Banking
BNM published the finalized strategy paper and feedback statement on value-based intermediation (VBI). The paper articulates strategies to strengthen the roles and impact of Islamic banking institutions toward providing positive and sustainable values to the economy, community, and environment. The strategies are envisaged to promote the application of VBI practices, which will lead to an improved suite of products and services offered by the Islamic banking institutions. These strategies are expected to be adopted and implemented based on the readiness of each Islamic banking institution.
BNM launched a consultation on this strategy paper on July 20, 2017 and received written feedback from respondents with diverse backgrounds. The respondents include financial institutions, talent institutions, consultants, and individuals, both local and international. An engagement session with the industry representatives was also held to discuss the feedback and suggestions in depth. Relevant comments and suggestions received have been incorporated in this finalized strategy paper. The necessary clarification and elaboration on commonly asked questions are also provided in the feedback statement, which covers the following key areas:
- Definition of VBI
- Potential implication of VBI adoption to business modality and risk management
- Implementation approach of VBI strategies
- Streamlining adoption of VBI with existing initiatives
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Keywords: Asia Pacific, Malaysia, Banking, Islamic Banking, Value-based Intermediation, Strategy Paper, BNM
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