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The Public Lecture by The Royal Award Recipient 2014 at Global Islamic Finance Forum – Introductory Remarks by Dato Dr Nik Ramlah Mahmood, Deputy Chief Executive, Securities Commission Malaysia

The Public Lecture by the Royal Award Recipient 2014
at Global Islamic Finance Forum

Thursday, 4 September 2014 @ 9.00am - 9.30am

INTRODUCTORY REMARKS 
by

Dato Dr Nik Ramlah Mahmood
Deputy Chief Executive, Securities Commission Malaysia

 

1.

Salutations

 

Bismillahi-rahmaa-nirahim.

Yang Amat Berbahagia Tun Musa Hitam, Chairman of the Jury for The Royal Award for Islamic Finance 2014.

Respected members of the Jury, distinguished guests, ladies and gentlemen.

Assalamualaikum warahmatullahi wabarakatuh and a very warm welcome to everyone.

I am very honoured to be here this morning to give an introduction to this first Public Lecture by the Recipient of The Royal Award for Islamic Finance 2014.

2.

Introduction

 

2.1

Islamic finance, principally due to the universally accepted ethical principles that it promotes, has today gained acceptance by many - Muslims and non-Muslims.  Islamic finance is where it is today because of outstanding individuals in Malaysia and elsewhere who not only dared to dream but had the courage, conviction and ceaseless energy to champion the cause of Islamic Finance.  Cognisant of this some seven year ago, the Securities Commission Malaysia's International Advisory Committee (IAC), which provides strategic input and recommendations on the development of the Islamic capital market, had mooted the idea of an international Award to accord recognition to outstanding individuals who have contributed significantly to the development of the industry.

 

2.2

Jointly organised by the Securities Commission Malaysia (SC) and Bank Negara Malaysia, under the Malaysia International Islamic Financial Centre (MIFC) initiative, The Royal Award for Islamic Finance (The Royal Award) aims to create greater awareness, understanding and acceptance of Islamic finance globally. This Award thus honours visionaries who inspire others to create a positive impact in the world through the shared values and principles of Islamic finance. Given out once every two years, the award is presented by the King of Malaysia, His Majesty the Yang di-Pertuan Agong.  The inaugural Award was presented to Shaikh Saleh Abdullah Kamel in 2010 and the second recipient of The Royal Award in 2012 is Iqbal Khan.  The Royal Award has also recognised in 2010 the late Dr. Ahmad El-Naggar, often referred to as ‘Father of Modern Islamic Banking’ with a posthumous honourable mention. 

3.

Introducing The Award Recipient 2014 and His Contributions

 

3.1

We have with us today, the recipient of Royal Award 2014, Dato’ Dr Abdul Halim Ismail, from Malaysia.  Many of you would have heard the citation read by the Chairman of the Jury during the Award dinner two days ago.  You would also have seen the short video describing Dato’ Dr Halim’s journey and contributions in bringing Islamic finance industry to where it is today.  You will also have the benefit of seeing the video after my introduction.  Allow me however to share just some of his many achievements with you.  Dato’ Dr. Abdul Halim was the first Managing Director of Bank Islam Malaysia Berhad (BIMB), the first Islamic bank in the country, incorporated in 1983.  He has many distinctions to his name, not just in successfully implementing the structure of modern banking that incorporates Shariah contract of commercial transactions or mu’amalah, but also the incorporation of Syarikat Takaful Malaysia, the alternative to insurance as well as Islamic stockbroking.  Establishing and operationalizing each of these pioneering institutions were indeed very demanding and arduous tasks as there was at that time a considerable gap between the Shariah and financial practice. 

 

3.2

Dato’ Dr Halim was not formally trained in Shariah, but because he studied at the ma’ahad or religious school in his early years, his passion for the Shariah never waned.  He has the extraordinary capability of not just understanding the Shariah but with his formal training in economics, he is gifted with the skill to explain the intricacies of modern financial transactions using the language of the Shariah that became easily understood by the Shariah community. That was indeed a tremendous achievement for the ummah.  Many a gap was thus narrowed or bridged, and the Bank that was under his stewardship was able to implement Islamic finance under the model of modern financial intermediation, that led to numerous product innovations.

 

3.3

Many people perhaps may not be aware that Dato’ Dr Halim was the prime mover in evolving Islamic finance from more than just banking to capital market.  In order to provide for diversity of investments by the Islamic financial institutions back in the 80s, Dato’ Dr Halim created the concept of activity screening for the stocks listed on the then Kuala Lumpur Stock Exchange (now Bursa Malaysia). This concept not only opened a new avenue for investment, but it also enabled Muslim ownership in the listed corporations.  This was a significant contribution by Dato’ Dr Halim to the Islamic capital market.  The screening of listed stocks as you know is today the key driver for the growth of both Islamic equity market and Islamic fund management.

 

3.4

The development of the sukuk market started in 1990 when Shell MDS Sdn. Bhd, issued Malaysia’s as well as the world’s first Islamic bond – then called Syahadah al Dayn or Certificate of Debt.  The bold move to enable the securitisation of receivables or debt arising from the Islamic contract of financing took place during Dato’ Dr Halim’s tenure in BIMB. This pioneer sukuk issuance as we know, has led to the fast-paced development of the sukuk market as what we are witnessing today. 

 

3.5

After making BIMB a success Dato’ Dr. Halim initiated the establishment of Malaysia’s first full-fledged Islamic stock broking company, BIMB Securities Sdn Bhd.  At BIMB Securities, Dato’ Dr Halim managed to innovate several forms of Shariah compliant structures to facilitate the sophisticated needs of stockbroking, that has led to wide acceptability by the stakeholders.

 

3.6

With the increasing prospects for Shariah approved securities the SC soon after its establishment in 1993, set up the ICM Unit which comprises of researchers trained in both fiqh mu’amalat and capital market practices to undertake research on product origination and ICM operations.  This was followed by the formation of the SC’s Shariah Advisory Council (SAC) in 1996 whose role was to advise the SC on Shariah related matters on ICM activities.  Dato’ Dr Halim was one of the pioneer members of the SAC and is still serving until today.  He continues to be a pillar of strength and a source of great inspiration for our ICM initiatives.

4.

Conclusion

 

4.1

Therefore it is indeed gratifying that the Jury was unanimous in its decision to select Dato’ Dr Abdul Halim as the Recipient of The Royal Award for Islamic Finance 2014, for his great contribution towards the development of Islamic finance that cuts across the key sectors of banking, takaful and stock broking. His work has inspired many other jurisdictions to follow suit, has enabled the progress and development of Islamic finance so that today, Malaysia is recognised as an international Islamic financial centre.