total banking system while the takaful sector has increased its penetration rate to 14. 6 % of the population. this is indeed very good progress. in the sukuk segment, malaysia is also the market leader with market share of more than 50 % in sukuk outstanding since year 2000. on the bank ’ s part, the islamic financial services act 2013 was introduced to modernise our regulatory and legal framework in adapting to changing needs of the industry. the issuances of 12 shariah standards set clear shariah parameters to facilitate innovation beyond credit - based products. there are more than 100 competitive financial products ─ ranging from basic financial services to wealth management ; corporate finance ; and investment banking. meanwhile, investment accounts have spurred greater investment intermediation activities. since its inception two years ago, investment accounts have grown to account for 12 % of total islamic deposits and investment accounts in 2016. its offering has been further intensified through the operationalisation of the investment account platform which has the potential to mobilise capital to various productive ventures effectively. the development of the islamic finance sector is seen not only in the headline numbers, but more importantly in addressing social and environmental concerns. islamic finance has taken the lead in the space of ethical finance where concepts, such as sustainable, responsible, impact investing ( sri ), have been embraced in pursuit of values beyond financial motivation. an important pioneering example in the islamic capital market is the issuance of sri sukuk by 1 / 4 bis central bankers'speeches khazanah that brings greater social impact through the promotion of quality education. just last month, the first green sukuk has also been issued in the country to promote clean and sustainable power supply. while we have come a long way, now we need to think of ‘ what ’ s next ’? from the bank ’ s perspective, we believe that the way forward to propel the islamic finance industry to the next level of growth ─ if i may, a ‘ game changer ’ ─ should give equal weight to both economic value creation and upholding ethical values. that is why we have embarked on vbi, which is a holistic approach for our industry players to deliver the intended outcomes of shariah that generate positive and sustainable impact to the economy, community and environment. while vbi shares similarities with concepts such as ethical finance, esg ( environmental, social and corporate governance ) and sri, the distinguishing factor is the central position of shariah in determining islamic finance

encik abdul rasheed ghaffour : value - based intermediation ( vbi ) propelling islamic finance address by mr encik abdul rasheed ghaffour, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the value - based intermediation ( vbi ) dialogue, kuala lumpur, 24 august 2017. * * * over the years, finance has lifted the lives of many, enabled businesses to grow and helped to fund the construction of public infrastructure that we now depend on. yet, as the global economy transforms and society evolves, the question as to whether the financial sector is sufficiently serving the needs of the real economy continues to be debated. the evidence from the global financial crisis underlines the need for the financial sector to restore its balance with the real economy. there is a need to rethink, reassess and re - strategise the role and contribution of the financial industry. undoubtedly, there is an increasing expectation for the financial sector to deliver greater impact to the economy and society. i am pleased to be here with you today and be part of this important milestone in our islamic finance journey. the issuance of the value - based intermediation ( vbi ) strategy paper by bank negara malaysia marks the next step to realising the full potential of islamic finance. on behalf of the bank, i wish to thank all of you who have devoted time and effort to work with us in this important initiative. your input has been valuable in designing the strategies and approach to advance vbi as a key thrust in propelling the islamic finance industry further forward. today, i would like to share some of my thoughts on the concept of value - based intermediation. i will begin by giving an account of the achievements of our industry within the past decades. i will then touch on the role of vbi as a catalyst for growth with positive impact and the call for islamic finance to lead the way in realising the visions and objectives of vbi. islamic finance in malaysia has evolved and grown by leaps and bounds over the last 30 years. today, we have a well - developed and regulated islamic finance industry. there are diverse industry players, both local and foreign. prior to 2000, there were only two islamic banks and two takaful operators in the country with total market share and takaful penetration rate of less than 5 %. islamic banking assets have now grown to capture more than a quarter of the