Islamic Banking Industry Remains Resilient Amid West Asia Uncertainties -- AIBIM
KUALA LUMPUR, April 8 (Bernama) -- Malaysia’s Islamic banking industry remains resilient, supported by strong capital and liquidity positions, amid uncertainties in West Asia, said the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM).
AIBIM said that while Malaysia’s economic fundamentals remain sound, geopolitical tensions may have indirect spillover effects through higher energy prices, market volatility, and potential disruptions to trade and supply chains.
"These could impact business costs, inflation, and cash flows for certain segments of the economy.
"The Islamic banking industry remains vigilant and ready to respond to these evolving risks," it said in a statement today.
The association said the industry continues to uphold the values of justice, compassion, and social responsibility, while advancing value-based intermediation (VBI) to deliver sustainable and inclusive outcomes.
In 2024, Islamic financial institutions channelled RM148.6 billion into VBI-aligned activities, including support for SMEs, green financing, and social initiatives, reinforcing resilience in key sectors of the economy.
In supporting these efforts, Islamic banks are also advancing initiatives introduced by Bank Negara Malaysia, including the use of risk-sharing instruments such as i-CITA, as well as programmes like iTEKAD Protection.
AIBIM highlighted that these initiatives aim to strengthen financial resilience, particularly among microentrepreneurs, and promote more sustainable financial outcomes beyond short-term relief measures.
"Islamic banks stand ready to support customers facing financial challenges through responsible and Shariah-compliant solutions, including restructuring and rescheduling where appropriate.
"Customers are encouraged to engage early with their respective banks," said AIBIM.
AIBIM emphasised that support mechanisms remain available, and the industry will continue working closely with regulators and stakeholders to safeguard financial stability and support inclusive, sustainable growth during this period of uncertainty.
-- BERNAMA