Diversification of Islamic Financial Insturments
165
global hub for Islamic funds and develop the country as an international provider of Islamic
wealth management services.
Towards Values- Based Intermediation (VBI)
Bank Negara has introduced a new initiative known as Values Base Intermediation (VBI). VBI
is defined as an intermediation function that aims to deliver the intended outcomes of Shariah
through practices, conduct and offerings that generate positive and sustainable impact to the
economy, community and environment, without compromising the financial returns to
shareholders.127 It has the objective of Strengthening the Roles and Impact of Islamic Finance
in Malaysia.
3.8.6 POLICY RECOMMENDATIONS
Malaysia’s Islamic finance industry has recorded significant development and growth since its
inception; the market has reached a comprehensive structure with great degree of
diversification in the products and services offered in the market. The products range from
deposit, financing, trade financing, treasury products, money market products, Islamic Capital
Market products and Takaful products. These products and services are supported by
comprehensive regulatory framework along with the standards and guidelines that enable the
market to operate in very efficient and effective manner.
Despite significant achievement, there are some key recommendations that might be
contribute to the on-going development of the Islamic finance industry, they are as follows:
 The Financial instruments, products and services required more clear guidelines to
ensure certainty, the Central Bank of Malaysia has engaged in series of Policy
documents issuance, which include Shariah requirements and operational
requirements. The exercise should cover the entire Shariah contracts used in the
Islamic financial system; the Shariah standards should cover banking, Islamic capital
market and Takaful.
 Encourage more collaboration between the different market players such as AIBIM,
MTA, CIIF, FAA, AIF, ASAS, MFPC, AFA, and other market representatives to have clear
and long term vision and collaboration to move the resources towards an ultimate
objective, where each one will complement the mission and vision of the other
organization.
 Wealth management and financial planning industry is a small industry but very
prominent, and coming up in a very big way, that deserves more support and guidance
from the regulators and the market to ensure its steady growth and development. In
line with this, Securities Commissions Malaysia has launched a 5-year Islamic Fund
and Wealth Management Blueprint in January 2017 to identify strategies and key
initiatives to strengthen Malaysia’s positioning as a global hub for Islamic funds and
develop the country as an international provider of Islamic wealth management
services.
127 Bank Negara Malaysia, Value-Based Intermediation, p6.