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Borneo Bulletin Yearbook 2019
ISLAMIC BANKING
Autoriti Monetari Brunei Darussalam (AMBD) in
2016 published the Brunei Darussalam Financial
Sector Blueprint 2016-2025 (FSBP). The FSBP
guides the development of Brunei's financial
sector and sets out the strategic framework
within which AMBD will be working with
other ministries and stakeholders to reach the
objectives of Brunei Vision 2035.
The FSBP identifies five key pillars that form
critical components of the financial ecosystem.
These include: monetary and financial stability;
competitive and innovative financial institutions
and services; robust and modern infrastructure;
enhanced international integration; and human
capital development.
The blueprint identifies core areas where the
financial services sector can act as an enabler
for growth in the country, one of which is
expanding Brunei’s Islamic finance capabilities.
The FSBP shares that a key focus of financial
sector development is the strengthening of
Brunei as an international Islamic financial hub.
As stated in the blueprint, “Brunei has affirmed
the growing prominence of a more diverse
foreign presence and the higher level of foreign
participation in the domestic Islamic financial
markets, particularly in the sukuk and takaful
market.”
“Initiatives will be put in place to further
accelerate the internationalisation of Islamic
Finance moving forward, thereby establishing
a more significant role for the financial system
in the intermediation of international financial
flows. This will involve the introduction of more
innovative Syariah-compliant financial products
and services that will meet the more diverse
global demands for Syariah-compliant financial
solutions.”
Syariah-compliant assets in Brunei
show growth
The positive progress of the Islamic capital
market in Brunei was highlighted during a
keynote address by Minister of Home Affairs
Pehin Orang Kaya Seri Kerna Dato Seri Setia
(Dr) Haji Awang Abu Bakar bin Haji Apong, who
is also the Deputy Chairman of AMBD Board of
Directors.
The keynote address was delivered at the
Brunei Darussalam Islamic Capital Market
Conference on October 22, 2018.
The minister shared that Syariah-compliant
assets in Brunei have shown remarkable growth
in the second quarter of 2018 compared to two
years prior, increasing 82 per cent.
“The sovereign sukuk market also continues
to grow with the continuous support of
the Government of His Majesty Sultan Haji
Hassanal Bolkiah Mu’izzaddin Waddaulah ibni
Al-Marhum Sultan Haji Omar ‘Ali Saifuddien
Sa’adul Khairi Waddien, Sultan and Yang Di-
Pertuan of Brunei Darussalam. The total amount
of issuances has reached BND12.3 billion so far,
growing by more than 10 per cent annually on
average for the past five years,” he said.
It was shared that Islamic funds distributed
to domestic investors, meanwhile, have held
steady ground, totalling around BND100 million
since 2017.
“A major milestone in the Islamic capital market
is the construction of the new AMBD building
which will be funded through the issuance of
Sukuk Ijarah Mausufah Fi Zimmah, the first
infrastructure project in Brunei to utilise sukuk
financing,” the minister added.
Giving his forecast on the Islamic capital market
in Brunei in five years, the minister said, “The
market is still young, but five years from now,
I hope to see a deep capital market that drives
sustainable economic development through
the efficient mobilisation of funds, leading to a
thriving private sector and job creation.”
“To get there, we will need a vibrant network
of talented individuals pushing the envelope; a
close public-private partnership; market players
who can serve all of society’s needs from
the individual and the small business, to the
conglomerate and the government; institutional
investors that take a more proactive role to
contribute back to the society; and an increase
in product diversity and innovation.”
“But more importantly, I envisage our capital
market, and Islamic capital market specifically,
to become a platform for Socially Responsible
Investments (SRI) and Green Finance, in order to
support the achievement of the United Nations
Sustainable Development Goals.”