Maybank Philippines, Incorporated officially commenced its Islamic banking operations last August 14, 2024, marking a significant milestone in the country’s financial landscape.
Photo shows HE Dato Abdul Malik Melvin Castelino (front row, 3rd from left), Ambassador of Malaysia to the Philippines, together with Nor Shahrizan Sulaiman (front row, 4th from left), Deputy CEO of Maybank Islamic, Judith E. Sungsai (front row, 2nd from left), Managing Director, Financial Supervision Sub-Sector 1 of the BSP and Abigail Tina M. Del Rosario (front row, 5th from left), Country Director and President and CEO of Maybank Philippines, during the ribbon cutting ceremony. Joining them are representatives from the Department of Trade and Industry, LGU in Basilan, and other officers of Maybank.
This move follows the grant of authority from the Bangko Sentral ng Pilipinas (BSP) dated July 4, 2024, making Maybank Philippines the second Islamic banking unit (IBU) licensed by the BSP. The first IBU license was granted in June 2023 to CARD Bank, Inc., a microfinance-oriented rural bank.
Maybank’s entry a pioneering step for commercial banks
Maybank Philippines’ entry into Islamic banking is a pioneering step for commercial banks in the Philippines, as it becomes the first to hold an IBU license.
The bank held a soft launch for its Islamic banking operations last July 25, setting the stage for a new era of financial services that adhere to Shari’ah principles. This initiative underscores Maybank’s commitment to broadening its financial offerings and promoting inclusivity in the country’s banking sector.
Islamic banking, governed by Shari’ah principles, prohibits the collection and payment of interest, emphasizing risk-sharing, ethical investments, and the promotion of economic justice.
Under BSP regulations, an IBU is a specialized division, department, office, or branch of a conventional bank that strictly operates in accordance with these principles.
The introduction of such banking services is seen as a strategic move to cater to the needs of the growing Muslim population in the Philippines, as well as to attract clients who prefer financial services aligned with ethical and religious considerations.
BSP Managing Director Judith E. Sungsai speaking during the inauguration of Maybank’s IBU
A significant milestone in the development of Islamic finance in PH
The inauguration of Maybank’s IBU was graced by BSP Managing Director Judith E. Sungsai, who highlighted the importance of this development in the broader context of Islamic finance in the Philippines. “The integration of Islamic banking in Maybank’s operations is a significant milestone in the development of Islamic finance in the Philippines,” said Managing Director Sungsai.
She also emphasized the BSP’s commitment to supporting the growth of the Islamic banking sector, which is seen as a vital component of the country’s financial inclusion agenda. In 2023, the Islamic Banking and Finance (IBF) Core Team of the BSP was named regional winner of the “Presidential Lingkod Bayan Group Award” for their work in developing Islamic finance in the country.
“The BSP will continue to work closely with industry players to ensure the robust and sustainable growth of the Islamic banking sector,” Sungsai added, underscoring the central bank’s proactive stance in fostering a conducive environment for the expansion of Islamic banking.
The BSP has introduced a series of regulatory reforms aimed at encouraging both domestic and foreign banks to participate in this emerging sector. These reforms are designed to provide clarity and certainty to potential market entrants, while also ensuring that the principles of Islamic finance are upheld.
The BSP’s support for the entry of new players into the Islamic banking sector aligns with its broader commitment to enhancing financial inclusion and fostering economic development. By promoting a diverse range of banking services, including those that adhere to Shari’ah principles, the BSP aims to ensure that all segments of the population have access to financial products that meet their specific needs and preferences.
A strategic vision of catering to a wider customer base
Maybank’s venture into Islamic banking is expected to set a precedent for other commercial banks in the Philippines. As the first commercial bank to obtain an IBU license, Maybank is positioned to lead the way in the development of a robust Islamic finance market in the country.
The bank’s decision to offer Islamic banking services reflects its strategic vision of catering to a wider customer base while also contributing to the country’s financial stability and economic growth.
The official launch of Maybank’s IBU marks the beginning of what many industry experts believe will be a period of significant growth for Islamic finance in the Philippines.
As more banks explore the potential of Islamic banking, the sector is poised to play an increasingly important role in the nation’s financial system, providing new opportunities for investment, savings, and economic development.
In the end, Maybank Philippines’ foray into Islamic banking represents a landmark achievement, not only for the bank but also for the Philippine financial sector. As the BSP continues to advocate for financial inclusivity and innovation, the growth of Islamic banking is set to become a cornerstone of the country’s evolving financial landscape.