THE Islamic banking industry in Malaysia intermediated RM16.51 billion in net zero or green financing, and RM61.55 billion in social financing last year, showed the Value-Based Intermediation (VBI) Report 2022.

The report, commissioned by the Association of Islamic Banking and Financial Institutions Malaysia (Aibim), said Aibim member banks reported RM50.34 billion in VBI deposits and investment accounts for last year, up by RM1.66 billion from 2021, while RM184 million was intermediated by them for zakat, sedekah, iTekad, waqf, corporate social responsibility and charities, an increase of RM81 million from the preceding year.

In a statement today, the association said the report was unveiled by Aibim president and Bank Islam Malaysia Bhd group chief executive officer Mohd Muazzam Mohamed at the JC3 Journey to Zero Conference 2023 today.

“The report centres on the evolution of Islamic banks from emerging to engaging in their VBI journey, which maximises their influence on socio-economic development and the role of Islamic banking in achieving sustainability, resilience, and ethical financial practices.

“The report also features transformative action taken by Islamic banks to shape a prosperous and sustainable future for Malaysia and the global community,” it said.

It said the VBI Community of Practitioners, comprising 16 Islamic banking institutions that are members of Aibim, was at the forefront of advancing sustainable finance through the development of VBI Financing and Investment Impact Assessment Framework Sectoral Guides.

“The third set of sectoral guides is currently in development for agriculture, mining and quarrying, road transportation, and waste management, and is expected to be released by the end of 2023,” the association said.

Aibim said the current set of guides played a vital role in aligning VBI and climate risk initiatives by including detailed case studies that address Bank Negara Malaysia’s Climate Change and Principle-Based Taxonomy Guiding Principles, highlighting the VBI community’s unwavering commitment to sustainable and climate-resilient finance.

The sectoral guides were established in addition to the six sectoral guides issued in 2021 and 2022.

Aibim said the association would ink a memorandum of understanding with the United Nations Global Compact Network Malaysia and Brunei, along with the Association of Banks in Malaysia, which would focus on advancing sustainability practices and supporting the championing sustainable development in fostering the growth of small and medium enterprises in Malaysia. – Bernama, October 25, 2023.