KUALA LUMPUR, Oct 3 — Bank Negara Malaysia (BNM) introduced two new measures today to encourage the adoption of Value-based Intermediation (VBI), a platform to reorient Islamic financing models towards sustainable positive impact.
These are the VBI Impact Assessment Framework (VBIAF) and the VBI Scorecard.
BNM governor Datuk Nor Shamsiah Mohd Yunus said the new tools will likely lead to important changes in the way financial institutions make decisions as well as to banking and takaful portfolios.
“The [VBIAF] provides guidance on the assessment of financing and investment applications taking into consideration economic, social and environmental impact.
“[The] scorecard supports the implementation of performance measurement frameworks for Islamic financial institutions that drive positive value and impact on society and the environment,” she said during the Global Islamic Finance Forum 2018 today.
Nor Shamsiah said VBI would alter Islamic finance models, including the drivers of profitability and risks over the time.
She cited the example of expert advice to borrowers on how to mitigate the environmental costs of the projects for which they are seeking financing as one such feature of the initiative.
“VBI-oriented Islamic financial institutions can, and indeed should, also play an important role in mobilising resources to finance climate change mitigation and adaptation initiatives.
“As we further develop the VBI systems for Islamic finance in Malaysia, this will be an area of important focus,” she said.
