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null EPICENTRE November 2023: Malaysia continues to lead the IFDI global ranking for the 11th consecutive year

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EPICENTRE November 2023: Malaysia continues to lead the IFDI global ranking for the 11th consecutive year
Malaysia continues to lead the IFDI global ranking
for the 11th consecutive year
 
In the recently published ICD-LSEG Islamic Finance Development Indicator (IFDI) Report 2023, Malaysia retained its first place in the overall ranking, for the 11th consecutive year. Malaysia also ranked first in four sub-categories, namely, financial performance, governance, awareness and sustainability. The report also covers growth prospects of the Islamic finance industry with the total assets of the global Islamic finance industry has reached USD4.5 trillion in 2022. The size of the industry is expected to reach USD6.7 trillion by 2027. 

In another development, the VBI Community of Practitioners (COP) has made commendable progress since the initiative was launched in 2017. The recently published third Value-based Intermediation (VBI) Report 2022 highlighted substantial rise of green financing among Islamic banks in Malaysia throughout 2022. The Islamic banking industry has intermediated RM16.51 billion in net zero or green financing, a growth of over 2.32 times in comparison to 2021

Download the infographic below for more information on VBI green initiatives in 2022
 
The MIFC Team
Download Infographic

Islamic Finance Development (IFDI) Report 2022: Navigating Uncertainty
The IFDI Report projected the Islamic finance industry to reach USD6.7 trillion in 2027, contributed by several key factors including the large Islamic finance markets such as Malaysia, continues to strengthen their domestic Islamic finance industries. In other parts of the world, different jurisdictions are also embracing the Islamic finance industry further through regulations.
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MIFC's role vital to drive Islamic finance growth
Concerted initiatives such as the Malaysia International Islamic Financial Centre (MIFC) are important to strengthen the Islamic finance development in Malaysia, which is also in line with the Madani Economy agenda. Bank Negara Malaysia (BNM) and the Securities Commission (SC) also established the MIFC Leadership Council last year in line with the ecosystem development to drive the next phase of development in strengthening Malaysia as an international Islamic financial centre.
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Islamic finance at COP28
Governor highlighted that Malaysia’s advancements in Islamic finance have provided an important springboard to grow and expand transition and green finance. The country is well-poised to play an important role in addressing the financing needs of the climate challenge with its mature Islamic finance ecosystem, dynamic and resilient players, diverse products, and comprehensive enabling infrastructure.

Access Governor’s speech here

Governor’s speech was followed by panel sessions on leveraging Islamic finance for Sustainability: (i) Opportunities & Best Practices and (ii) MENA and ASEAN Perspectives.

Click here to watch the sessions videos
Islamic finance role in advancing sustainable agenda

Islamic banks intermediated RM16.5b in net zero or green financing, RM61.6b in social financing
According to the third Value-based Intermediation (VBI) Report 2022, the Islamic banking industry has intermediated RM16.51 billion in net zero or green financing, and RM61.55 billion in social financing. The report also highlighted RM53.4 billion in VBI deposit, investment and other bank accounts, while RM185 million was contributed via zakat, sadaqah, iTEKAD, waqf, corporate social responsibility (CSR) and charities.
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IsDB and IMF to Enhance Partnership in Islamic Finance, Climate, and Green Initiatives
The Islamic Development Bank (IsDB) and International Monetary Fund (IMF) have committed to enhance the long-standing cooperation between the two international institutions and to scale up partnerships and joint work in the areas of Islamic finance and climate & green transition.
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ESG sukuk rises to USD33.3bln; Fitch expects further growth
Environmental, social and corporate governance (ESG) sukuk rose significantly in the third quarter of 2023 and is expected to grow further to cross nearly 8% of global outstanding sukuk in the next few years – Fitch Ratings.
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Joint report launched to mobilize Islamic banking for climate action
The United Nations Environment Program Finance Initiative (UNEP FI), the Islamic Development Bank (IsDB), and The General Council for Islamic Banks and Financial Institutions (CIBAFI) joined forces to enhance climate knowledge for the Islamic banking sector through the launch of report titled “Mobilising Islamic Banking for Climate Action”.
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Driving innovation for Islamic finance development

Labuan Financial Services Authority: Islamic Digital Asset Centre to revolutionise Labuan’s economic landscape
The Islamic Digital Asset Centre (IDAC) is set to revolutionise Labuan’s digital landscape with a comprehensive ecosystem aimed at promoting economic development across finance and non-finance sectors. IDAC envisions establishment of a blockchain hub that will attract cutting-edge technology solutions, applications, servers and high-end networks.
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BNM to refine several aspects of DITO Framework
Based on the feedback on the consultation paper of the Exposure Draft on Licensing and Regulatory Framework for DITO published in November 2022, Bank Negara Malaysia (BNM) will be refining several aspects of the Digital Insurers and Takaful Operators (DITO) Framework, including enhancements to provide clarity for emerging and innovative business models, such as embedded insurance and insurance-as-a-service.
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