MALAYSIA recently launched the Investment Account Platform (IAP), a cross border multi-currency channel linking into regional and global economies.
The Islamic finance market is currently characterised by a collection of domestic markets with little cross border activity, and faces challenges of financial intermediary, that of effectively matching investors seeking Sharia compliant opportunities to businesses seeking funding.
Speaking at the launch of the IAP product, Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia) stated the IAP is “more than a new and innovative medium for Shariahcompliant investments and fund raising initiatives”, but “signifies a fundamental shift towards providing solutions that addresses the prevailing gap in the current risk-transfer financial regime to one that now allows for financial institutions to include a wider range of investment intermediation activities that emphasises risk-sharing and thus facilitate a stronger linkage of finance and the real economy.”
IAP Value Proposition
The IAP will provide investors with direct access to a broad range of investment opportunities, and businesses as well as Islamic banks with a new source of funding.
Dr Zeti added “There is also the potential for institutions with specific mandates including Government agencies to strategically collaborate with the IAP and Islamic banks to form public-private partnerships to facilitate the efficient channelling of grants or funding and to facilitate financing opportunities for identified strategic ventures.”