OCBC Al-Amin, RHB Islamic pioneer US$175mil Islamic green term financing

RHB Islamic Bank CEO Datuk Adissadikin Ali (centre, left) and OCBC Al-Amin Bank CEO Tuan Syed Abdull Aziz Syed Kechik at the signing of the agreement

KUALA LUMPUR: OCBC Al-Amin Bank Bhd, the Islamic banking subsidiary of OCBC Bank (Malaysia) Bhd, has granted a ground-breaking US$175 million (US$1=RM4.60) Islamic green term financing facility to RHB Islamic Bank Bhd.

The facility makes OCBC Al-Amin the first bank in Malaysia to offer a green Islamic foreign currency and bank-to-bank term financing facility, according to a joint statement today.

The facility is also the first to feature a pioneering Islamic term financing using the use-of-proceeds approach in the financial institutions space in Malaysia.

RHB Islamic will use the green Islamic financing facility to provide its customers with end-to-end environmental, social and governance financing solutions in alignment with RHB Banking Group’s sustainable asset framework.

The term financing is embedded with an Islamic cross-currency swap arrangement, which provides a shariah-compliant hedging mechanism that protects against currency market fluctuations.

OCBC Al-Amin chief executive officer Syed Abdull Aziz Syed Kechik said the term financing extended to RHB Islamic is a landmark facility in both the country and the bank’s journey toward achieving the ideals of the Islamic banking industry’s sustainability agenda and value-based intermediation, in line with Bank Negara Malaysia’s Financial Sector Blueprint 2022-2026.

Earlier this year, Singapore-based OCBC Group and RHB Banking Group entered into a partnership on two sustainability-linked solutions featuring a two-year S$150 million sustainability-linked loan and cross currency swap between OCBC Group with RHB Bank Malaysia, and a S$100 million sustainability-linked loan to RHB Bank Singapore.

Since its establishment in December 2008, OCBC Al-Amin has remained among the top foreign Islamic banks in Malaysia, consistently placed among the top two in terms of assets since 2013. - Bernama

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