BY ALISA AMINUDIN

It set up its Islamic Banking business in Malaysia in 2016 . Today , UOB Malaysia provides leadership , best practices and support for the rest of the Group ’ s franchise across Asia for Islamic banking .

The bank also launched Current Account-i for SMEs and commercial business owners keen on exploring Islamic banking and finance solutions for their businesses .

“ We are offering exclusive Islamic Banking Solutions in the form of the Islamic Business Current Account-i to our customers ,” Mohd Fhauzi Muridan , Executive Director and Country Head of Islamic Banking UOB Malaysia , told @ HalalXtra .

“ This current account for businesses offers the same convenience as UOB ’ s conventional current account but with the added benefit of being Shariah-compliant .

“ To expand the touchpoints for the customer to reach us to start their Islamic banking journey with us , we have introduced the digital way to reach us . It is an improvement designed to make it more convenient for users .”

He said this mode was convenient , especially during the current pandemic , as the customers ’ face-to-face meetings with bank staff will be limited .

“ Hence , our customers can drop the enquiry on the Business CA-I via our dedicated website , and our officers will respond . Rather than pick up the call-in order to reach us , the alternative mode is to reach us online .”

In conjunction with Malaysia Day and the World Business Halal Conference ( WBHC ), the bank is offering for a limited time competitive profit rates to its SME customers to cater to their property financing needs .

The profit rates range from 2.88 per cent to 3.02 per cent ( subject to movements in the BFR ) with Banca Takaful subscription requirements . These rates will come in handy to SME halal customers to help cut costs in the long run .

Mohd Fhauzi talked about various aspects of Islamic banking , ESG , UOB Malaysia ’ s strategies and Shariah compliance .

Islamic banking is one of the proof points where UOB is committed to responsible financing . What are the commitments to support the businesses for sustainable growth ? The bank intends to balance growth with stability for the long term as we forge a sustainable future with our customers . We practice and are committed

to responsible financing in line with the bank ’ s direction of Shariah of not advancing financing to non-productive sectors such as entertainment . We are also in line with Environment , Social & Governance ( ESG ) principles . We are prudent and diligent in our assessment of financing before advancing any facilities to the customers .

We help businesses advance responsibly through Shariahcompliant financing . An example is our Term Financing-i for SMEs to purchase commercial properties or factories for business use . There is also the Shariah-Compliant SME Financing Schemes ( SSFS ) under SME Corp to assist SMEs to lower their monthly commitment via monthly rebates up to two per cent . Further benefits of Shariah financing and investments helps businesses tap into a wider pool of investors and generates positive and a sustainable impact on the economy and community .

What are the common risks of ESG in businesses , and what are UOB ’ s strategies to mitigate these risks ? The common risks of ESG include areas like indiscriminate pollution causing harm to the environment and human health , deforestation , forest fires , use of child or forced labour and occupational health and safety incidents . It also includes funding criminals , terrorists or any activity that results in war and conflict . The bank also channels capital & building relationship towards companies that are environmentfriendly , socially responsible and practice good governance .

The following are UOB ’ s strategies to mitigate ESG risks :

• The bank holistically approaches ESG risks when embedding them into the risk management framework

• For all customer applications , UOB implements the ESG checklist . The process is to assess and mitigate the ESG risks where the bank to identify activities of the companies , for example , as listed earlier , that are detrimental to society during the submission or proposal of the financing application .

• There is a Shariah compliant checklist for an Islamic banking proposal to ensure the businesses are Shariah-compliant . Only if these requirements are met are the business proposals considered by the bank .

UOB supports Bank Negara ’ s Valuebased Intermediation ( VBI ) in delivering the intended outcomes of Shariah principles . How does UOB comply with VBI and Shariah ? We assess Islamic banking activities ’ financing and investment activities

Mohd Fhauzi Muridan

and ensure they are aligned with Shariah principles through our ESG and Shariah checklist . Governance-wise , we have appointed a strong Shariah Committee ( SC ) to oversee all affairs to ensure Shariah compliance and governance . The SC members are of known names , have vast experience and are experts in the industry . All Shariah pronouncements and decisions made are per Bank Negara Malaysia ’ s Shariah Committee ’ s decisions . We also have our internal processes and procedures in ensuring we meet the requirements of Shariah and the VBI .

How do you reckon Shariah compliancy can lead Malaysia ’ s economy , and globally , during this pandemic ? To ensure Islamic banking is Shariahcompliant , the fundamental screening such as ensuring businesses are free from the prohibitive & non-productive elements such as entertainment and gambling are filtered from Islamic banking transactions . On top of that , being Shariah-compliant provides accountability , transparency , freedom from manipulation and being socially just . When dealing with Islamic banking , the elements of uncertainty or ambiguity are removed , such as terms and conditions . Both sides agree on pricing and commercial terms , i . e . the customer and the bank . Based on that , the pillar in doing business is fundamentally based on trust .

Customers have to declare truthfully on the accounts and the nature of their business . Similarly , the financing advances made by the bank are sustainable , Shariah-compliant and ESG in nature . Customers must service their commitment to the bank based on trust . Both sides would benefit if

they adhered to this pillar , especially during a pandemic . Transparency and accountability are crucial during the pandemic , and this will help foster a significant economic recovery .

Can you brief us on UOB ’ s business practices , conduct , and offerings that positively impact the economy , community , and environment ? Our sustainability strategy arises from our fundamental strengths and is rooted in our honour , enterprise , unity , and commitment . They reflect UOB ’ s expertise , the responsibilities we hold and the role we can play for the long-term benefit of our key stakeholders , including our customers . In driving growth sustainably , we incorporate sustainability risk elements in our approach to risk management .

It includes integrating ESG considerations into our credit evaluation and approval processes . We offer a range of sustainable solutions to help our customers make a difference in their communities . We are also progressively adopting and promoting climate-resilient practices to support our customers in their transition to a lower-carbon economy .

Beyond financing , we continue to make significant strides in growing our impact investing portfolio . As mentioned earlier , the methodology of screening non-Shariah compliant elements are part of ESG . It ’ s a natural process for our Bank in Islamic banking . UOB Malaysia is committed to supporting business , especially the SME sector . The bank shared some workable insights and solutions during the WHBC and would continue to support these sectors .– Xtra