IAIN PONOROGOIAIN PONOROGO

Etihad: Journal of Islamic Banking and FinanceEtihad: Journal of Islamic Banking and Finance

This study looks into how Value-Based Intermediation (VBI) is framed and implemented in the context of Islamic finance in Malaysia, especially through the efforts of Bank Negara Malaysia (BNM). VBI, which was introduced by BNM in 2017, is an initiative that aims to bring Islamic banking back to its original ethical foundations. It focuses on achieving the higher objectives of Shariah (Maqasid al-Shariah) by promoting practices that generate real, positive impact on the economy, society, and environment without sacrificing financial performance. The research uses qualitative methods, mainly by analysing documents such as the VBI strategy paper and other related guidelines issued by BNM. The study identifies the VBIAF and VBI Scorecard as key instruments that support the integration of value-based principles in financial institutions. Despite this progress, challenges remain, particularly the industrys profit-oriented mindset. The findings also confirm that VBI aligns closely with Maqasid al-Shariah and the United Nations Sustainable Development Goals (SDGs).

The study highlights VBIs potential to transform Malaysias Islamic finance landscape toward a more sustainable, value-driven, and impactful system.However, successful implementation requires a shift in mindset, skills development, and strong leadership.Collaboration among stakeholders, including regulators, banks, and the public, is crucial to ensure VBIs long-term success and alignment with the Maqasid al-Shariah.

Based on the findings, future research could explore the long-term financial performance of Islamic banks adopting VBI compared to conventional banks, investigating whether value-driven practices lead to sustainable profitability. Furthermore, a comparative study across different Islamic finance jurisdictions could identify best practices and challenges in implementing similar value-based frameworks. Finally, research is needed to develop standardized metrics and methodologies for accurately measuring the social and environmental impact of VBI initiatives, ensuring transparency and accountability in demonstrating the real-world benefits of this approach. These studies will contribute to a deeper understanding of VBIs effectiveness and inform policy recommendations for promoting a more ethical and sustainable Islamic finance ecosystem, ultimately fostering inclusive growth and societal well-being.

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File size1.14 MB
Pages16
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