legal and shariah framework in the sustainable development of islamic finance was extensively discussed. it is key to providing certainty and predictability to financial transactions. the current international financial crisis has demonstrated the importance of recognizing that the rapid transformation of the functioning of the international financial system had to be accompanied by the need to ensure that regulatory and legal framework was aligned with these developments. the relevance of legal framework is essential to providing certainty and predictability to the financial transactions and to the innovative products, thus promoting public confidence in the financial system. this is equally important for the islamic financial services industry in which this recent decade has seen a rapid evolution in terms of the innovation and in terms of its expansion. indeed, a robust legal framework in islamic finance instills public confidence in the islamic financial system, provides an enabling platform for practitioners to develop more innovative and complex financial products to meet the increasingly multifaceted consumer demands. in addition, it provides the mechanism for dispute settlement that takes into account the distinct features of islamic financial transactions. this is where the legal services industry has a vital role in providing sound legal solutions in islamic finance. it therefore provides an important " bridge " between shariah and legal parameters, thus enabling the operationalisation of shariah principles into legally enforceable islamic finance practices. in addition, by ensuring that the legal parameters are in compliance with shariah parameters and the regulations, it also becomes a risk mitigator. the legal aspects in islamic finance represents an important " bridge " between the governing shariah principles and the practice of islamic finance. the application of shariah principles in the light of the governing laws and regulations in each islamic financial transaction are interpreted through legal advice, in legal documentation of the financial transactions, and dealing with disputes. in documenting financial transactions based on specific shariah principles that underlie a financial product, the legal documentation reflects the tenets of shariah and that it is in full compliance with the laws and regulations governing the financial transactions. varying interpretations of shariah in particular between countries adds to the complexity when cross - border transactions are involved. from a domestic perspective, more jurisdictions are considering a central shariah council as the ultimate decision making body on shariah matters. across jurisdictions, there has been greater engagement thus bringing about increased convergence. mutual recognition of the interpretation of shariah principles across countries will contribute to the sustained growth of islamic finance. to promote consistent application of islamic financial contracts in malaysia, bank negara malaysia has

. we aim to further increase support for financing to businesses that can develop and scale green technologies and processes, or that are making meaningful efforts to transition to a low carbon model. financial institutions are also ramping up their own capacity to advise and provide technical support to smes on their transition journey, including in risk management and disclosure practices. these efforts are crucial to ensure alignment between banks'business and risk strategies with the transition path of smes. ladies and gentlemen, let me conclude my remarks. sme financing is an ongoing journey – and a crucial one for economic development and progress. although the share of bank financing to smes is high, relative to their current contribution to gdp, our goal is not to claim victory by a finite point in time, but rather to ensure, through effective policy interventions, that the broader financial system " beyond banks and beyond traditional forms of lending " is working to adapt and respond to sme financing needs. to do this, we will continue to engage closely with the sme community to understand your issues and challenges, and where relevant, to support your progress and development beyond financing. as these needs will continue to change over time, innovation is key. it goes without saying that we cannot do this alone. in any country, the agenda of uplifting smes calls for a whole - of - nation approach. government and financial policies play a critical role, but so does the willingness of banks to evolve current approaches. smes themselves also need to more actively engage in strengthening their own financial and business capabilities. bnm remains committed to working closely with partners within the industry and government. we will continue efforts to crowd - in private sector financing, whilst highlighting policy considerations and necessary reforms 4 / 5 bis - central bankers'speeches in the process. and we count on industry associations and experts to continue playing an active role as an aggregation point for smes, helping to raise awareness, co - create solutions and disseminate vital information. on that note, i thank you very much for your attention. 1 source : bank negara malaysia 2 source : bank negara malaysia 3 source : bank negara malaysia 5 / 5 bis - central bankers'speeches