New Malaysia measures to boost talent pool
Published: Sep 26, 2010 22:55 Updated: Sep 26, 2010 22:55
Malaysia has introduced several measures to boost the development of human capital in the Islamic finance industry under the Malaysia International Islamic Finance (MIFC) initiative. Developing the next generation of Islamic finance executives and experts remains a major priority of the government and the Bank Negara Malaysia, the central bank.
Malaysian Prime Minister Mohd Najib bin Abdul Razak, in his capacity as the minister of finance, accorded the “Project of National Interest” (Projek Berkepentingan Negara) status to INCEIF University in July 2010 in recognition of its role in the development of the human capital for Malaysia’s growing Islamic finance industry.
The status is granted retrospectively from 2007 to 2016, and according to Bank Negara Malaysia Assistant Gov. Muhammad Ibrahim, allows organizations and individuals who donate funds to INCEIF University, the post-graduate Islamic education arm of Bank Negara Malaysia (BNM), to offset their contributions through tax deductions.
Since its inception in 2006, INCEIF has received contributions totaling just under RM1 million most of which has been disbursed to over 251 deserving Malaysian and foreign students studying for INCEIF’s three programs which are the Chartered Islamic Finance Professional, the Masters in Islamic Finance and the PhD in Islamic Finance. Banks that have taken advantage of this tax-deductible contribution include Bank of Tokyo-Mitsubishi UFJ Ltd., CIMB Islamic Bank, EONCAP Islamic Bank, Etiqa Takaful, Affin Islamic Bank, Bank Islam Malaysia, Maybank Islamic and Securities Commission Malaysia.
At the same time, the Securities Industry Development Corporation (SIDC), the training and development arm of the Securities Commission Malaysia, the securities regulator, is also pioneered an annual Islamic Markets Program (IMP) aimed at participants from both emerging and developed countries. In fact, the fifth annual IMP took place in Kuala Lumpur in July 2010, which according to SIDC, is aimed at helping participants to analyze the philosophy and fundamentals of the Islamic Capital Market (ICM) and to distinguish between its various products; to evaluate Islamic equity, sukuk and derivatives as alternatives means of financing and investment to conventional products; and to assess the significance and essentials of corporate governance, risk management and sound regulation in promoting Islamic markets.
Given the rapid growth of the global Islamic capital market, especially the sukuk market, human capacity building is essential to accelerate the growth of the market.
“The ICM industry needs to be equipped with a new breed of innovators, regulators, intermediaries and risk managers with the right blend of capital market knowledge and understanding of Shariah principles. Furthermore there is a pressing need to enlarge the pool of human capital in the areas of Islamic finance, legal, accounting and risk management,” explained SIDC.
The very latest measure was in September 2010, when Bank Negara published a Circular, under the provisions of the new Cenrtral Bank Act 2009, on the issuance of Special Employment Passes (SEPs) to enable Islamic finance expatriates to work in the country and to develop the Islamic finance talent pool in the country. The circular sets out the procedures for the application of SEPs for Islamic finance expatriates. The applications are submitted to the Immigration Department of Malaysia as the authority for issuing the SEP through MIFC Secretariat.
The introduction of the SEP was formally approved by the Malaysian Ministry of Home Affairs on Dec. 16, 2009, and takes immediate effect from the date of the circular.
According to Bank Negara, the provisions of the circular is applicable to Islamic banking institutions licensed under the Islamic Banking Act 1983; banking institutions licensed under the Banking and Financial Institutions Act 1989 that carry out Islamic banking or financial business; development financial institutions prescribed under the Development Financial Institutions Act 2002 that carry out Islamic banking or financial business; Takaful operators (including retakaful) registered under the Takaful Act 1984; or any other institutions as the MIFC Secretariat may approve.
The SEP is applicable to Scholars employed by eligible Islamic financial institutions or institutions of higher education focusing on Islamic finance; Shariah scholars or advisers in the field of Fiqh Al-Muamalat (Islamic financial jurisprudence); academic experts in any field critical for the development of Islamic finance (for example, law and economics); corporate individuals employed by eligible Islamic financial institutions provided that their scope of work contribute directly to the development of Islamic finance at the levels of senior management, core divisions (for example, risk management and actuary); and services (for example, legal documentation, tax advisory and accountancy).
The SEP differs to the normal employment pass for foreigners in that it allows long termed residence and employment for Islamic finance expatriates; and is issued on a personal to holder basis therefore it allows change of employers within the Islamic financial sector under the same SEP.
Human capital development is not only confined to young people. The country has also been pioneering continuous education programs for bank and company directors and executives from both the conventional and Islamic banks through the Kuala Lumpur-based International Centre for Leadership in Finance (ICLIF), which was renamed this month as The ICLIF Leadership and Governance Centre.
The aim is to encompass fast developing changes in the global regulatory, financial and corporate governance regimes. In fact, Bank Negara Malaysia’s own Financial Institution Director's Education Program (FIDE) will now be fully managed and delivered by The ICLIF Leadership and Governance Centre. The FIDE program developed under a collaborative effort between Bank Negara Malaysia, Perbadanan Insurans Deposit Malaysia (PIDM) and ICLIF was launched in November 2008 with the aim of promoting high impact boards within the financial sector, and to develop world class directors who are advocates of best practices and excellence in corporate governance.
This, said BNM in a statement in September 2010, is important given the critical role of governance, and in particular the quality of boards of directors, which was highlighted in the recent financial crisis as a key priority in efforts to further strengthen financial stability through the sound, prudent and responsible management of financial institutions.
To date, more than 200 directors of Malaysian financial institutions have benefited from the FIDE program and have become catalysts for change in boardroom practices within their organizations. FIDE is currently the only governance initiative in the region that focuses exclusively on the financial sector and which also outreaches participation of directors of financial institutions from outside Malaysia, covering Asia Pacific, Middle East and Africa.
Comments
OUK SOKVISAL
Sep 27, 2010 21:38
Report abuseOUK SOKVISAL
Sep 27, 2010 21:39
Report abuse