MALAYSIA - The central bank on May 7 became the first in Southeast Asia to cut its key interest rate this year, by 25 basis points to 3.0%, moving to support its economy at a time of concern about global growth.
KUALA LUMPUR: A revised trade credit insurance/takaful framework will be issued by year-end or early next year, said Bank Negara director of Islamic banking and takaful department, Mohd Zabidi Md Nor.
The current framework only covers trade credit insurance.
He said the framework revision would provide clarity in terms of product recognition and criteria for qualifying credit risk mitigation under the Capital Adequacy Framework for takaful providers and operators who offer trade credit products in the country.
“The guidelines that we have issued do not capture takaful. So it is timely (for us) to refresh this and bring visibility to a higher level.
“My team and the industry are working on this... so that the capital framework will be adjusted to reflect that exquisite acceptance of trade credit takaful and insurance, as part of the credit risk mitigation framework,” he said at the Trade Credit Takaful Forum in Kuala Lumpur on Tuesday.
The half-day forum, titled, “How To Make It Work In Malaysia - The Next Step”, was jointly organised by Marsh Insurance Broker (Malaysia) Sdn Bhd and Marsh Takaful Brokers (M) Sdn Bhd, in cooperation with the central bank.
At present, Exim Bank is the sole trade credit takaful provider in Malaysia and the product is only available internally.
Mohd Zabidi urged takaful operators in the country to venture into this under-tapped market as it provides tremendous business opportunities and growth potential. - Bernama
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