zeti akhtar aziz : islamic banking and finance welcoming address by dr zeti akhtar aziz, governor of the central bank of malaysia, at the inauguration of the islamic financial services board, kuala lumpur, 3 november 2002. * * * " in our endeavour to build a strong and sound islamic financial system, of importance are the critical milestones that we establish to crystallize this quest... the first was the establishment of the islamic development bank in 1975. the second was the establishment of the accounting and auditing organization for islamic financial institutions ( aaoifi ) in 1990. and today, the establishment of the islamic financial services board marks another important milestone ". it is our great honour and pleasure to welcome you to this momentous occasion to commemorate the inauguration of the islamic financial services board. this occasion is of particular significance as, on this day, with the grace of allah, we are laying the foundation for the promotion of a sound and stable islamic financial system that will pave the way for its successful integration as a viable and credible component of the global financial system. allow me to take this opportunity to express our gratitude to yang amat berhormat dato seri dr. mahathir bin mohamad for his unwavering commitment and support for the development of islamic banking and finance. this has indeed opened a gateway for malaysia to develop a comprehensive islamic financial system and our participation in the global development of islamic banking and finance. malaysia is honoured to host the islamic financial services board and is committed to the development of a sound. islamic financial services industry. ladies and gentlemen : islamic banking and finance is ascending to greater prominence in the global financial system and has fast extended beyond the traditional predominantly muslim economies to major industrial economies. this growing significance is a manifestation of the viability of islamic banking as a financial intermediation channel that supports economic growth and development of nations. while it was initially developed to fulfill the needs of the muslims, islamic banking and finance has now gained universal acceptance. the appreciation of its promising potential has prompted interest amongst conventional financial institutions to venture into this fast expanding market. in essence, islamic banking and finance can expect to evolve into an increasingly important component of the global financial system. at the heart of this expansion, emerged the need for the development of the regulatory dimension to explicitly address the unique features of islamic banking and finance. at present, islamic financial institutions have, to a large extent, been governed by the conventional regulatory framework, reinforced by

but one good thing is that majority of them own smartphones. with this, we knew that it was an opportune time to go all out on digitalisation of remittance services. the implementation, however, will be an uphill task because of the geographical barriers we face in east malaysia. to ensure we reach out to as many migrants as possible, we collaborated with the plantation companies and organised remittance talks and fairs in the plantations themselves. the participating banks facilitated the migrants to open bank accounts ; and remittance service providers taught the migrants how to register and to use their e - remittance services. we also encouraged the plantation companies to pay the migrants ’ salaries into their bank accounts to eliminate the use of cash for remittance transactions. of course, digitalisation would not work without good internet connections. we, therefore, engaged malaysian communications and multimedia commission ( mcmc ) on possibility of boosting internet connections in the areas where we held the greenback activities. with digitalisation, migrants can now send money home anywhere, anytime. this eliminates the need to travel great distance to the nearest town, which 1 / 3 bis central bankers'speeches can be costly and risky at times. the project team experienced first - hand the numerous logistical challenges just to get into the plantations. a single journey can take about a 3 - hour drive from town. today, i am happy to note that project greenback in sabah has produced encouraging results. we have sensitised close to 5, 000 individuals. more than 1, 600 of them have registered to use e - remittance channels. a total of rm6. 9 million equivalent worth of remittances were sent from sabah using echannels. the most encouraging result is that average remittance cost in sabah has reduced significantly, to below 3 %. 8 months ago, it was much higher. although there is much to be done to increase the numbers, the outcomes are testament that our hard work and perseverance have paid off. we have reached an important milestone and this tells us that technology can be the gateway to financial inclusion. technology has the potential to be a game changer. industry players need to step up to next level to enhance consumer experience the project greenback initiative in sabah will lay a strong foundation for industry players to take the digitalization agenda to the next level. we must remember that disruptive technologies can radically change the way things are done. the old ways may not work