Shariah Accountability Practices of Islamic Banks in MalaysiaAmanah, Islam, Islamic banking, Shariah, Zakat

Speaking at Invest Malaysia 2020, Finance Minister Tengku Datuk Seri Zafrul Aziz stated that in order for Malaysia to meet its estimated gross domestic product (GDP) growth targets of between 6.3% and 7.5% in 2021 (as estimated by international agencies), continuing the successful management of COVID-19 was crucial.   The Minister stated that although the infection rate has been low and the recovery rate high, the public are being reminded to avoid complacency and take precautionary measures. Tengku Zafrul added that it was important to avoid an e...

Set to be unveiled on the 6th of November 2020, Malaysia’s Finance Minister, Tengku Datuk Seri Zafrul Aziz, announced that Budget 2021 will centre around four broad themes: caring for the people, steering the economy, sustainable living, and enhancing public service delivery.   Regarding the first goal, caring for people, the Minister noted that, the primary aims of the Prihatin Rakyat Economic Stimulus Package (Prihatin) and the National Economic Recovery Plan are to protect and empower the people of Malaysia. Speaking at Invest Malaysia 2020 on...

According to international credit rating agency Moody’s Investors Services (Moody’s), the planned merger between Qatar-based banks Masraf al Rayan (MAR) and Al Khaliji Commercial Bank (Al Khaliji) is expected to have a larger Islamic franchise and market share, which should support greater pricing power, and hence profitability. Further, the larger scale would also assist in containing funding costs by enhancing deposit-gathering capabilities. The banks’ individual strengths will benefit the merged entity...

On the 7th of July 2020, Bank Negara Malaysia (BNM) lowered the overnight policy rate (OPR) by a further 25 basis points (bps) to 1.75%, making this the fourth rate cut for 2020.  In line with this most major banks across Malaysia were reported to have immediately adjusted their base rates and base lending rates on the same day, with Malayan Banking Bhd (Maybank), RHB Banking Group and CIMB Bank, amongst the first three to announce the cuts. BNM’s rate cuts for 2020 have totalled 125 bps to date with the...

The inaugural meeting of the Islamic Finance and the United Nations Sustainable Development Goals (SDGs) Taskforce, organised by the Islamic Finance Council UK (UKIFC) in collaboration with the Government of the United Kingdom (UK) convened on the 7th of July 2020. The focal point of the meeting was the discussion of the role of Islamic Finance in addressing the USD 2.5 trillion SDGs funding gap as part of the post COVID-19 recovery. Present at the virtual meeting, representatives from the UK-...

United Arab Emirates (UAE)-based, Abu Dhabi Islamic Bank (ADIB) has raised its Foreign Ownership Limit (FOL) from 25% to 40% of its issued capital in an attempt to diversify its investor portfolio. According to a disclosure submitted with the Abu Dhabi Securities Exchange, ADIB had obtained shareholder approval to amend its Articles of Association to increase its FOL during a Shareholder meeting held on the 29th of March 2020. In addition, ADIB had also obtained required regulatory approvals from the Central Bank of the UAE and the Securities and Commoditie...

Saudi British Bank (SABB) announced on the 6th of July 2020 that it will be offering the first Sukuk under its newly established local Sukuk program at a value not exceeding SAR 5 billion or equivalent. According to a bourse filing with the Saudi Stock Exchange (Tadawul), the issuance size of the Sukuk is to be determined based on market conditions, subject to relevant laws and regulations. According to Tadawul, the issuance of the SAR-denominated tier-II Sukuk will commence on the 6th of July 2020 and end on the 28th of July 2020, targeting sophisticated invest...

The International Islamic Liquidity Management Corporation (IILM) has entered into the second half of its issuance calendar for 2020 with the re-issue of its USD 1.01 billion (MYR 4.3 billion) short-term Sukuk in three series.  The short-term Sukuk, rated A1 have one-month, three-month and six-month tenures, respectively and the IILM stated that the final pricing across all tenures fell within the indicative pricing guidance reflecting strong interest from primary dealers, as well as end-investors. According to the IILM, the tender attracted significan...

On the 6th of July 2020, Bandar Hajjar, President of the Islamic Development Bank Group (IsDB), announced the launch of a USD 2.3 billion aid package, which includes USD 700 million from the IsDB’s private sector entities. The aid will support three initiatives in partnership with the United Arab Emirates (UAE) Ministry of Economy and Annual Investment Meeting (AIM). Expert speakers at the webinar noted that the primary objective of the initiative was to promote and provide a solid platform for trade and investment opportunities. Three online initiatives w...