MALAYSIA: With the
deadline to reclassify banking deposits into either Islamic deposits or
investment accounts fast approaching (mid-year), Malaysian Islamic banks
are in the midst of rolling out their re-engineered products as well as
introducing new solutions to meet the requirements of the Islamic Financial
Services Act 2013 (IFSA 2013). While there has been some concern over loss
of market share during this period of transition, the country’s pioneering
Shariah financier, Bank Islam Malaysia, is confident that income streams
would not be negatively affected and is optimistic that business would
continue to grow following full implementation of the regulation.
The bank today expanded its suite of products with three new investment
accounts (Special Investment Account Mudarabah (SIA Mudarabah), Waheed
Investment Account Wakalah (WIA Wakalah) and Al-Awfar Account), becoming
the first player to roll out products in compliance with IFSA 2013. Two out
of the three (SIA Mudarabah and WIA Wakalah) are designed for corporate
customers as Bank Islam seeks to bolster its corporate line and reduce
dependency on its retail business. Chief strategy officer Hizamuddin
Jamalludin confirmed to the media that the bank is looking at diversifying
its portfolio to boost its corporate financing assets and retail financing
assets ratio to 30:70 from the current 24:76.
Admitting that the bank’s consumer operations have consistently
outperformed its corporate business which makes it challenging to augment
the construct of its portfolio, Hizamuddin said that Bank Islam is keen to
attract large corporates in order to capitalize on the value chain or chain
of vendors. He added that the bank is targeting a financing growth twice
that is projected of the wider industry on the back of the group’s current
balance sheet: 15% against 7-8%.
Previously, Mudarabah and Wakalah products were considered as deposit
accounts; however, the Malaysian government is moving towards enhancing the
Shariah compliance of its Islamic financial industry which culminated in
the IFSA 2013. Under the new regulation, Mudarabah, Wakalah and Musharakah
instruments will be distinguished as investment products to be backed by
the bank’s portfolio of assets, instead of the Malaysia Deposit Insurance
Corporation.
|
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.