Kuala Lumpur, 13 October 2025 — Malaysia’s central bank is reinforcing its commitment to equitable economic outcomes as it navigates the challenges posed by globalisation. In his opening remarks at the Global Islamic Finance Forum 2025, Governor Datuk Seri Abdul Rasheed Ghaffour emphasized that Bank Negara Malaysia (BNM) intends to ensure “shared prosperity” while confronting shifting global forces.
A Renewed Mandate: Finance as a Conduit for Inclusion
Governor Abdul Rasheed reminded attendees of how the world economy has been reshaped by global trade, technological advances, and cross-border capital flows between 1990 and 2020 — phenomena that helped lift more than a billion people out of extreme poverty. Yet he qualified that this momentum is now under strain, due to rising geopolitical fragmentation and supply chain realignments.
“We must look back at the values and systems that once made commerce a conduit for shared prosperity and finance for a force for human progress,” he said, urging that modern finance not lose its moral grounding.
Among his proposals, the Governor cited the growing role of Islamic social finance mechanisms, especially zakat and waqf (endowments), as stabilising tools that can foster resilient support for communities during economic stress. He also flagged BNM’s plan to expand risk-sharing structures (like Musharakah and Mudarabah) through initiatives such as i-CITA (backed by RM 100 million in government funding).
Tactical Responses Amid Global Headwinds
Abdul Rasheed pointed to a reversal in previously smooth globalisation trends: increasing trade tensions, regulatory fragmentation, and a tilt toward economic nationalism. He cited International Monetary Fund (IMF) forecasts of ~3% global growth as evidence that Malaysia must rely more on internal resilience than external tailwinds.
Under the strain of such volatility, the central bank plans to lean on strategic innovation and inclusive finance instruments. The governor asserted that social purpose and commercial viability should converge, emphasizing that markets must also deliver societal value.
Specifically, he announced that BNM will advance:
- The roll-out of i-TEKAD, an Islamic social finance programme supported by a RM 5 million matching government grant, aimed at extended social welfare reach.
- A policy lens for deeper adoption of risk-sharing finance, aligning banking practices more closely with Islamic finance values.
- Reinvigoration of waqf governance and zakat frameworks to sharpen their impact, increase transparency, and better measure social return on investment.
Significance & Risks for Malaysia and the Region
The Governor’s remarks signal a shift in how BNM views its mandate, from stability alone to inclusion and purposeful finance.
- Alignment with National Goals: The emphasis on shared prosperity dovetails with Malaysia’s broader Shared Prosperity Vision 2030 (SPV 2030), which aims to more equitably uplift marginalized groups across states and demographics.
- Challenge of Execution: Embedding social finance at scale is complex. Effective implementation of risk-sharing models or expanding waqf programs demands strong governance, clear oversight, and recalibration of regulatory frameworks.
- Balancing Growth and Equity: The central bank must ensure that its social ambitions do not compromise macro stability, especially in a period of global economic uncertainty.
- Regional and Islamic Finance Leadership: Malaysia’s push to redefine the role of Islamic finance could influence neighboring countries, especially Indonesia, the Gulf economies, and South Asian nations, to link finance more explicitly to social outcomes.
Outlook & Watchpoints
- Policy details and timelines for i-CITA, i-TEKAD, and broader risk-sharing expansion.
- Legislative or regulatory changes that must accompany these shifts in financial architecture.
- Early indicators of institutional uptake, capital mobilization, and measurable social impact from zakat/waqf channels.
- How BNM balances these inclusive initiatives while managing inflation, external shocks, and financial system stability.
- Whether this narrative shift becomes a guiding principle across Malaysia’s broader financial and economic planning.
As Malaysia positions itself amid crosscurrents of globalisation, Bank Negara’s renewed emphasis on equity and social purpose suggests a vision for finance that seeks not only to grow, but to share.
