KUALA LUMPUR: Bank Negara Malaysia will officially launch the value-based intermediation (VBI) initiative scorecard in October this year at the Global Islamic Finance Forum 2018 (GIFF 2018).
Bank Negara director of Islamic banking and Takaful Mohd Zabidi Md Nor said the scorecard is currently being finalised with the help of participating banks.
“VBI is very much a game changer in Islamic finance as it gives equal weight to both economic value creation and upholding ethical values,” he said at the Standard Chartered Saadiq (Saadiq)'s forum on 'VBI at the core of sustainable banking,' here, earlier today.
“We are in the midst of developing the scorecard with the help of the VBI Community of Practitioners (COP). It is important that we have the input of the practitioners so that the scorecard stays practical and achievable,” he said.
To date, there are already nine Islamic banking institutions in the VBI COP, namely Bank Islam, Bank Muamalat, CIMB Islamic, Agrobank, HSBC Amanah, Maybank Islamic, AmBank Islamic, Alliance Islamic and Saadiq.
“All the banks are already working towards getting a good score on their VBI scorecard that will be announced at GIFF2018 in October,” said Zabidi.
He explained that the scorecard comprises quantitative and qualitative elements that measures different segments.
“For quantitative elements, it singles out the elements of financing that focuses on the triple bottom line, namely social, environmental (or ecological) and financial,” said Zabidi, while noting that specific details will be revealed at the official announcement in October.
Meanwhile Employees Provident Fund (EPF) Head of Equity Research, Nor Azam Yahya said EPF is leading by example when it comes to both VBI and ESG.
“As you know, EPF is a majority shareholder in a lot of public listed companies (PLC) in Malaysia and it has been our long time practice to incorporate transparency in integrated financial reporting in these companies,” he said.
“However, VBI is beyond integrated financial reporting and a lot of work have to be done with the PLCs and the smaller cap companies. The EPF is leading by example and we hope that by doing this, the trickle down effect will take place from the bigger players to the smaller players.”
The adoption of VBI into the local Islamic finance scene was first announced by the central bank in late last year and has slowly grown traction among industry players.