@Green September/October 2020 | Page 26

26 finance

@ green | September-October , 2020
THANKFUL RECIPIENT : Maybank Islamic allocated RM2.9 million , which benefitted more than 15,000 less fortunate families across 10 Southeast Asian countries this year . Here is one of the recipients of the programme with her box of food essentials in Kelantan .

The ‘ new normal ’

Can Islamic banks support the growing sustainability movement ?
Digital banking will definitely be part of the new normal of doing banking due to its seamless and efficient experience .”

Across the world , we are seeing how societies , economies and vulnerable groups are being adversely impacted by the recent lockdown period to curb the spread of Covid-19 .

Malaysia is no exception . However , the same period where factories , businesses and borders were closed has brought about an unintended benefit in the form of reduced activities that cause pollution .
Though the positive environmental effects could be short-lived as the global economy resumes , specific behavioural changes may be here to stay . Albeit the pace and degree of sustainable behaviour differs by region , today ’ s consumers are more aware of the broad sustainability challenges facing the world .
In a global survey conducted by Accenture to identify the impact of Covid-19 on consumer behaviour dated April 2020 , it found that consumers were more cognisant of limiting waste , cost-conscious and in favour of sustainable products .
Results show that 68 per cent of respondents prioritise limiting food waste , 54 per cent consciously make sustainable choices , and 39 per cent are reducing the frequency of shopping .
Despite the bleak scenario , the Malaysian Islamic banking sector is well-positioned to capture transformative opportunities amidst the potential downturn . It could potentially emerge from the Covid-19 crisis stronger and more sustainable .
Bank Negara Malaysia ( BNM ) last year introduced the Value-Based Intermediation Financing and Impact Assessment Framework ( VBIAF ) – a collaboration with Islamic banking industry players to guide and assess financing activities in accordance to value-based banking practices .
The initiative has spurred significant activity in the sector , such as the adoption of Environment , Social , and Governance ( ESG ) criteria as part of credit assessments . The VBIAF has contributed to the wider domestic banking industry as well , serving as a reference point for documents such as BNM ’ s discussion paper on Climate Change and Principal-based Taxonomy . It aims to increase awareness and encourage banking practices that align with climate change objectives .
Unlike other financial systems , Islamic Finance encompasses both commercial and socio-economic components . The latter comprises Zakat , Waqf , and Sadaqah , which could be mobilised to promote financial inclusion in supporting vulnerable segments of society as well as to preserve the environment .
In the face of Covid-19 , Malaysian Islamic Banks have played a proactive role towards delivering aid , sourced from their zakat and CSR funds , to those segments of the public or communities that were severely impacted by the pandemic .
Maybank Islamic allocated RM2.9 million , which benefitted more than 15,000 less fortunate families across 10 ASEAN countries . In addition , microfinancing programmes such as iTekad managed by Bank Islam , have demonstrated the benefits of utilising zakat funds to support micro-entrepreneurs affected by Covid-19 .
This shows that Zakat can be channelled to eligible recipients in ways that can empower them and help them generate a sustainable income . Another silverlining brought by the Movement Control Order ( Mco ) is the adoption of digital banking .
Apart from a sharp jump in digital banking transactions , Islamic banks have leveraged on digital channels to help those affected by the pandemic .
Platforms such as ‘ Sama-Sama Lokal ’ by Maybank , for one , has helped struggling Ramadhan Bazaar merchants , hawkers and farmers facing marketing and logistics issues during the Mco to gain awareness among the wider community via the Bank ’ s Maybank2U digital platform .
Moreover , Islamic banks facilitate the disbursement of Zakat and financial assistance via digital means such as e-wallets and mobile apps which are proven to be useful and effective amidst the movement control period .
Digital banking will definitely be part of the new normal of doing banking due to its seamless and efficient experience .
Hence , it is apparent that Islamic Banks are positioned and equipped to meet the evolving demands of consumers to potentially emerging from the Covid-19 crisis stronger .
As the global economy continues its inexorable shift towards sustainability , Islamic Banks must capitalise on its position at the forefront of the sustainability agenda by providing innovative Islamic Financial solutions to support the transition towards a more sustainable future . — @ green