KUALA LUMPUR, Bank Negara Malaysia (BNM) will make the Malaysian Islamic Overnight Rate (MYOR-i) the mandatory benchmark for all Islamic financial products starting July 1, 2027 — a move the central bank calls a major structural shift in the Islamic finance industry.
Governor Datuk Seri Abdul Rasheed Ghaffour said MYOR-i, the world’s first transaction-based Islamic benchmark rate, will enhance transparency, consistency and shariah compliance across the sector.
“This is not just a technical adjustment; it is a structural transformation,” he said in his opening remarks at the Global Islamic Finance Forum 2025, officiated by Prime Minister Datuk Seri Anwar Ibrahim on Monday.
The adoption of MYOR-i is part of five key initiatives Malaysia is implementing to strengthen its Islamic financial ecosystem — focusing on risk-sharing structures, inclusive development, global connectivity and talent building.
Abdul Rasheed said the first initiative involves promoting risk-sharing contracts such as musharakah and mudarabah through programmes like i-Cita, which was launched last month with RM100 million in government support to encourage shariah-compliant financing innovation.
He added that BNM is also reviewing policies related to shariah contracts and investment accounts to foster a more enabling environment for Islamic investment intermediation.
The second initiative aims to align Islamic social finance with mainstream systems, citing the iTekad programme as a model that combines financial inclusion with social impact. The programme’s latest expansion, supported by a RM5 million government matching grant for takaful contributions, will further enhance financial protection for participants.
Malaysia also aims to position Islamic finance as a key driver in the halal economy and sustainable finance — two trillion-dollar growth sectors. Through the Malaysia International Islamic Financial Centre (MIFC) Leadership Council, the country has established a global connectivity framework, now advancing with the creation of the MIFC Business Network (MBN).
Abdul Rasheed said nine industry leaders across banking, takaful, capital markets and related services have already committed as founding members of the MBN, with more to join soon.
The final pillar focuses on talent development and innovation. He noted that institutions such as INCEIF University and the Islamic Banking and Finance Institute Malaysia (IBFIM) are evolving their roles to nurture the next generation of Islamic finance professionals across ASEAN.
“The message is clear — for Islamic finance to lead, we must invest in people who can imagine, design and deliver its future,” he said. The governor also highlighted that the global Islamic finance market is expected to exceed US$9.7 trillion (RM41 trillion) by 2029, adding that its growth must be driven not only by size but by leadership, innovation and purpose.
