Agrobank Now A Full-fledged Islamic Bank

Kuala Lumpur – Effective 1^st July 2015, Agrobank officially becomes a Full-Fledged Islamic Bank (FFIB). This announcement was made at a ceremony which was inaugurated by YB Dato’ Sri Ismail Sabri Yaakob, Minister of Agriculture and Agro-based Industry (MoA), at Sasana Kijang, Kuala Lumpur. The ceremony was also attended by 180 guests.

In his speech, YB Dato’ Sri Ismail Sabri mentioned that Agrobank’s transition to Islamic banking system is seen as a positive development based on the rapid growth of the Islamic banking sector in this country. This transition is in line with the government’s target to increase Islamic financing up to 40% of total financing by 2020.

“I am confident with Agrobank as Full-Fledged Islamic Bank Institution will help to complete the chain of Shariah-compliant supply of resources and facilities of from all aspects, whether in providing food sources or providing funds in implementing projects,” he said.

According to Tan Sri Faizah Mohd Tahir, Chairman of Agrobank, Agrobank’s transition as FFIB started with the aim to have a Shariah-compliant banking system and also to support the Government’s initiative to establish Malaysia as a condusive, strong and dynamic Islamic financial hub.

“Agriculture and agro-based industry are synonym with food processing activities. With this transition, Agrobank is able to provide Islamic banking products and funding to cater for the halal food industry. It also adds the confidence of the investors on the halal status of a product as it is backed up by Shariah-compliant business transactions,” said Tan Sri Faizah.

“In 2014, Agrobank contributes 32.1% worth RM2.61 billion of financing to food production sector from total funding of RM5.5 billion. This represents 1/3 market share of food processing financing. We believe, by offering a Shariah-compliant financing, Agrobank will give more confidence to entrepreneurs, food operators and customers to conduct their business in accordance to Shariah principles.

“In addition, the Shariah-compliant product will also benefit the clients as it is more transparent with no hidden charges and also focus on profit sharing. It will definitely attract more clients, including non- Muslim customers,” he added.

Tan Sri Faizah also said Agrobank’s transition as a Full-Fledged Islamic Banking has become the main focus of the Bank, particularly after the introduction of the Agricultural Bank of Malaysia Act 2008 and the efforts have been intensified in the years 2012 to 2014 with a focus on offering Islamic financing products, system conversion process operation, conversion of existing loans and deposits as well as providing training and guidance to Agrobank’s staff.

Also present at the ceremony was Mr Badlisyah Abdul Ghani, President of the Association of Islamic Banking Institutions Malaysia (AIBIM). He said the Agrobank’s transformation into a full Islamic banking showed visionary leadership.

“The transformation of Agrobank into a Full-Fledged Islamic Bank showcases the visionary stature of its leaders. We welcome them with open hands into the Islamic finance fraternity. It is a bold step and we look forward to seeing them grow to greater heights and playing more prominent role, especially in the development of the agricultural sector using proven and competitive Islamic financial products and services”, said En Badlisyah.

In conjunction with the launch, a forum was also organised with titled “The Implementation of Islamic Banking in Economic Jihad: New Perspectives”. Among the panelists involved in the discussion were Dato’ Wan Mohd Fadzmi Wan Othman, President/ CEO of Agrobank, Datuk Dr. Mohd Daud Bakar Chairman of the Shariah Advisory Council of Bank Negara Malaysia, Mr Shamsuri Mohd Yusof, Director of ZS Armin Sdn Bhd and also Mr Badrul Zaman Baharudin, Project Manager Ramly Food Industries Sdn Bhd.