The IsDB delegation, with the presence of the Islamic Development Bank (IsDB) Director General of Global Practice & Partnership, Dr. Issa Faye, and CEOs and Heads of Treasury of Malaysia’s Islamic financial institutions, Affin Islamic Bank and RHB Islamic Bank, have formally signed Murabahah Master Agreements to facilitate fund placements across the institutions.

The signing of the Murabahah Master Agreements is expected to bolster investment linkages between the multilateral development bank and domestic financial institutions, building upon Malaysia and IsDB’s decades-long partnership and a previously signed Memorandum of Understanding in 2021 between the Government of Malaysia and IsDB to cultivate cooperation on Islamic finance and related domains.

The signing ceremony took place during the IsDB-IMFC Treasury Dialogue in Kuala Lumpur, witnessed by Bank Negara Malaysia Deputy Governor, Adnan Zaylani Mohamad Zahid. The dialogue is held in conjunction with the Global Forum on Islamic Economics and Finance (GFIEF) officiated by Malaysia’s Prime Minister, YAB Dato’ Seri Anwar Ibrahim.

The dialogue featured an exchange of investment insights and opportunities, showcasing the depth of Malaysia’s sovereign and corporate debt securities market, its diverse and innovative sukuk structures and the development of Islamic derivatives and hedging markets. Likewise, discussions also highlighted investment opportunities in the IsDB’s ‘AAA’ rated sukuk, alongside the IsDB Treasury’s liquidity investments in high rated investment grade sukuk in Malaysia. Various parties expressed commitment to continue exploring mutually beneficial opportunities, particularly from a broader and deeper Islamic financial market in Malaysia.

Representatives from various banking and investment institutions also attended the event, actively participating in the investor engagement session, further enriching the discourse and paved the way for further collaborations.

BNM Deputy Governor Adnan Zaylani Mohamad Zahid in his welcoming speech highlighted three critical impetuses to further unlock potential synergy between Malaysia and IsDB in Islamic finance. First, strategic alignment, driven by aims to advance the ummah. Second, innovation and conducive market access at the core of partnership and third, capacity building to future-proof talents in Islamic finance. DG Adnan also offered his thought on the formation of a ‘Global’ Islamic Financial Market Committee which would magnify multi-jurisdictional efforts with a strategic vision to propel the global Islamic financial market to expand all our intermediation frontiers, and nurture resilient cross-border liquidity management.

IsDB Director General Dr. Issa Faye emphasised that “The IsDB is committed to fostering deeper financial ties with Malaysia's Islamic financial market, with current engagements exceeding USD 1 billion. Our goal is to further increase these exposures, reflecting our dedication to mutual growth and investment opportunities. IsDB's Center of Excellence in Kuala Lumpur, dedicated to enhancing Islamic finance ecosystems in IsDB member countries, further underscores our commitment to advancing Islamic capital markets in Malaysia and worldwide.”

Islamic Financial Market Subcommittee (IFMC) Chairman Hanif Bin Ghulam Mohammed added, “The Treasury Dialogue serves as a platform to unlock the long-standing investment potential between IsDB and Malaysia’s financial players while also fortifying existing partnerships. Both parties are able to collectively broaden investment opportunities and explore new avenues for collaboration and innovation. It is instrumental in facilitating a deeper understanding of each other's investment preferences and risk appetites, paving the way for mutually beneficial investment linkages – a fact underscored by today's signing of the Murabahah Master Agreements.”

Islamic Development Bank
Malaysia’s Islamic Financial Market Subcommittee
5 June 2024