suhaimi ali : keynote address - paynet engagement forum keynote address by mr suhaimi ali, assistant governor of the central bank of malaysia ( bank negara malaysia ), at the paynet engagement forum, kuala lumpur, 17 july 2024. * * * first of all, allow me to extend my gratitude to paynet for inviting bank negara malaysia to speak at the inaugural paynet engagement forum. it is my pleasure to be here with all of you today. malaysia's payment landscape has undergone significant transformation over the past decade, marked by increased digitalisation and innovation. notably, digital payment adoption has sustained its sharp upward trajectory, in line with the vision set in the financial sector blueprint. in 2010, the average e - payment transactions per capita in malaysia was at a modest 44 transactions. fast forward to 2023, we have seen an impressive leap to 343 transactions per capita. this means that today, each adult malaysian makes about one e - payment transaction almost every single day, a striking contrast to less than once a week a decade ago. at this rate, we are on track to meet our goal of 400 e - payment transactions per capita by 2026 much sooner than expected. in fact, we could reach this milestone sometime this year. this positive trend has been supported by pivotal changes in the payment ecosystem which have reshaped the way we conduct business today and manage our daily transactions. users have easy access to a wide array of payment channels such as qr codes, cards and internet banking which offer services that are convenient, fast, affordable and secure. the ecosystem is also being driven by healthy competition not just among banks but also with non - banks that are agile, pushing the boundaries on innovation, and willing to support unserved and underserved segments. these factors have enabled malaysia to fast - track our transition to a more cashless society. and by embracing digital payment, this has also helped boost productivity, expand market access, and ultimately improve the livelihoods of individuals and small businesses, thereby paving the way for a more vibrant economic future. having said that, our work does not stop here. bnm remains committed to advancing digitalisation of the financial sector to benefit the people. this vision entails fostering a thriving digital payment landscape supported by payment infrastructures that are not only robust and secure, but also adaptable to rapid changes in technology. ladies and gentlemen, as we reach the halfway mark of our financial sector blueprint 2022 - 202

the shari'ah framework and islamic accounting standards. however, islamic finance is distinct from conventional financial activities in terms of its underlying philosophy on the prohibition of interest, which in turn shapes the nature of its financial transactions, and its risk attributes. a separate regulatory framework therefore needs to be developed in view of the unique risks in islamic financial transactions to provide for their effective assessment and management. such a prudential regulatory design would further complement concurrent efforts that are underway to develop islamic financial markets and islamic financial instruments. this architecture will contribute towards the development of a robust and resilient islamic financial system that can effectively preserve financial stability and contribute to balanced growth and development. ladies and gentlemen : in recognition of this need, a proposal was made two years ago to establish an organization to spearhead the development of a uniform set of prudential, supervisory and disclosure standards for the islamic financial services industry internationally. this proposal was crystallized and endorsed during a consultative meeting of a group of central bank governors, and officials from the islamic development bank ( 1db ), the accounting and. auditing organization for islamic financial institutions ( aaoifi ) and the international monetary fund ( imf ) in prague in september 2000 during the occasion of the lmf - world bank annual meetings. the endorsement set in motion the formation of a preparatory committee, with officials from bahrain, iran, malaysia and sudan, and representatives from the imf, idb and aaoifi, to develop the terms of reference and operational structure for the islamic financial services board. in a meeting of governors in april this year, malaysia was mandated to lead a steering committee for the establishment and inauguration of the islamic financial services board in kuala lumpur. today's historic event is the culmination of this extensive two - year consultative process. ladies and gentlemen : the islamic financial services board, ifsb will serve as an association of central banks, monetary authorities and other institutions, entrusted to develop and promulgate internationally accepted prudential regulatory standards and best practices. in advancing this mission, the board will examine the extent to which existing international best practices need to be adapted and complemented to be consistent with shari'ah principles. the ifsb will liaise and collaborate with other international standard setting bodies to achieve the common goal of international financial stability. in addition, the board will also focus on the development of risk management instruments, cultivation of sound risk management practices and facilitate the implementation of robust risk control mechanisms in islamic financial institutions through research