KUALA LUMPUR, Dec 28 — Financial institutions, especially Islamic banks, must focus on their traditional roles of mobilising liquidity and solvency support to the real economy in times of unprecedented challenges such as the Covid-19 pandemic, according to a banker.
Hence, said AmBank Islamic chief executive officer Eqhwan Mokhzanee, banks in Malaysia had come to the fore via schemes such as the moratorium, repayment assistance and targeted repayment assistance, and facilitated the intermediation of government and Bank Negara Malaysia funds.
“Financial institutions need to recognise that the success and ability to remain profitable and relevant is intrinsically dependent on the long-term prosperity of the societies which the financial institutions serve,” he said at the Islamic Finance News (IFN) Asia OnAir Forum held recently.
Only in an inclusive society founded on human dignity and the sustainable use of natural resources, could customers and in turn, financial institutions thrive, he told the panel on “The opportunities for a back-to-basics approach and how Islamic finance can and will flourish”.
Additionally, he said AmBank has formalised its sustainability framework with environmental, social and governance (ESG) impacts taken into account, in its strategies, activities and portfolio.
He said the current pandemic was a painful reminder for the bank to re-think and re-purpose some of its strategic direction, policies, focus segment and corporate social responsibilities (CSR).
“We are accelerating our financial inclusion agenda by providing financing to the business start-up segment via the AmBank Islamic SME Biz Start-up-i.
“In addition, our AmBank BizRACE 3.0 and BizCONFERENCES are capacity building platforms to support SMEs in the areas of Halal, Industrial Revolution 4.0 and Digitalisation, which would stand them in good stead for a post-Covid-19 era,” he said.
As part of its community empowerment initiatives, Eqhwan said AmBank has organised financial literacy programmes, as well sourcing for job placements and distributed zakat to poor families over a six-month period.
“Over the medium-term, we are building our capability to overlay environment and social (ES) risk grade with credit risk grade to arrive at a final decision in relation to loan/ financing applications.
“This will encourage the transition of customers to be more ES friendly. There will be a gradual implementation because we understand that customers and economy need time to transit,” he added.
The forum, which was hosted by IFN from November 24 to 26, gathered industry players to deliberate on key issues pertaining to the involvement of Islamic financial institutions in supporting the revival of the economy which had been adversely impacted by the Covid-19 pandemic.
Source: https://www.malaymail.com/news/money/2020/12/28/financial-institutions-play-imperative-role-during-economic-crisis-says-amb/1935519