KUALA LUMPUR: Bank Negara Malaysia is intensifying its focus on value-based intermediation (VBI) to further strengthen the Islamic financial system in 2025, with particular emphasis on sustainability and climate-related initiatives. The central bank highlighted this direction in its Annual Report 2025, underscoring its commitment to fostering impactful innovation, supporting the halal economy, and expanding global opportunities within Islamic finance.
According to the report, Bank Negara aims to ensure that Malaysia’s Islamic financial ecosystem continues to evolve in a way that delivers meaningful and lasting benefits. This effort is guided by three key strategic priorities: advancing value-based innovation, strengthening the Islamic finance ecosystem, and maintaining Malaysia’s position as a global leader in the field.
Islamic finance is built on the principles of maqasid Shariah, which emphasize fairness, equitable wealth distribution, and shared responsibility. Value-based intermediation translates these principles into practice by encouraging financial institutions to focus not only on profits but also on generating positive and sustainable impact for society. In 2024, Islamic financial institutions channelled RM148.6 billion into VBI-aligned activities, including financing for small and medium enterprises (SMEs), green initiatives, and social finance programs, highlighting a strong focus on the real economy.
To further strengthen this impact, Bank Negara introduced several initiatives aimed at driving meaningful innovation. These include a RM15 billion program to help halal SMEs adopt sustainable practices, a RM100 million i-CITA fund to promote risk-sharing financial instruments, and a RM5 million iTEKAD Protection initiative to enhance financial resilience among microentrepreneurs.
At the same time, the central bank is taking a comprehensive approach to strengthen the overall Islamic finance ecosystem. This includes improving the regulatory environment, deepening Islamic financial markets, and ensuring strong Shariah compliance and certainty. Efforts are also underway to future-proof the Shariah ecosystem through research, talent development, and greater public awareness.
Bank Negara is also focused on reinforcing Malaysia’s global leadership in Islamic finance. Its priorities include strengthening international business linkages, promoting mutual Shariah recognition, accelerating innovation, and building global capabilities. These efforts are aimed at creating a more connected and progressive global Islamic finance landscape.
Islamic finance continues to grow in importance in Malaysia, reflecting its ability to meet evolving financial and protection needs. In 2025, Islamic financing accounted for 48 percent of total financing, while takaful participation reached 24.5 percent, demonstrating the sector’s expanding role in supporting households and SMEs.