Kuala Lumpur, 6 June 2023 – The next step in the Malaysian Islamic finance journey is to ensure that the industry reflects the values of Islam, beyond mere Syariah compliance, says Tan Sri Nor Mohamed Yakcop.
The former Minister of Finance II (Jan 2004 – April 2009) and Minister in the Prime Minister’s Department responsible for the Economic Planning Unit (May 2009 – May 2013), Tan Sri Nor is currently the Chairman of Khazanah Research Institute, which, inter alia, aims to provide critical and objective policy input for Malaysia’s continued growth and development.
Delivering his talk on `Islamic Finance in Malaysia – Going Forward’ at INCEIF Discourse Series 6 on campus today, Tan Sri Nor said going forward, it was time for Islamic finance to fully embrace the “soul of Islam.”
In his book `Islamic Banking In Malaysia An Early Document 1981’, under the chapter `The Conceptual Framework of an Islamic Banking System’, Tan Sri Nor wrote “In Islam, therefore, moral values cannot be divorced from the functioning of economics, whether in spending or investing, savings, distribution of income, etc. Islamic economy cannot claim to be successful without the prerequisite morality.” In short, Islam champions a wider distribution of wealth and disfavors any undue accumulation and concentration of wealth among a selected group in the community.
At the talk, Tan Sri Nor highlighted the landscape of Islamic finance in Malaysia including its history and current state of affairs, and offered his thoughts on what’s ahead after 40 years.
According to him, to move forward, the industry could replicate Malaysia’s successful experience with the Government-Linked Companies transformation (2005-2015) under a Putrajaya High Level Committee chaired by the Prime Minister. He also proposed the setting up of a Putrajaya High Level Committee on Islamic finance, with MIFC Leadership Council as the secretariat. This Committee should attempt to align the interests of all Islamic finance institutions and the authorities.
Tan Sri Nor was with Bank Negara Malaysia from 1968 to 1994 and again from September 1998 to April 2000. Whilst at BNM, he played a key role in the development of Islamic finance in Malaysia, including the Islamic pawn broking system (Al-Rahnu). He was also responsible for the setting up of the Securities Commission and Malaysia’s first rating agency, RAM Holdings Bhd.
INCEIF Discourse Series is a monthly event where current issues of interest in the Islamic finance & sustainability sphere and beyond are discussed by scholars, policy makers and industry players. Today’s hybrid event was attended by students, staff and industry players and attracted online participants from Indonesia, Kyrgyzstan, Egypt and Somalia.