A revised trade credit insurance/takaful framework will be issued by year-end or early next year, said Bank Negara director of Islamic banking and takaful department, Mohd Zabidi Md Nor.
He said the framework revision would provide clarity in terms of product recognition and criteria for qualifying credit risk mitigation under the Capital Adequacy Framework for takaful providers and operators who offer trade credit products in the country, reported the Bernama News Agency. The current framework only covers trade credit insurance.
“The guidelines that we have issued do not capture takaful. So it is timely to refresh this and bring visibility to a higher level.
“My team and the industry are working on this... so that the capital framework will be adjusted to reflect that exquisite acceptance of trade credit takaful and insurance, as part of the credit risk mitigation framework,” he said at the Trade Credit Takaful Forum in Kuala Lumpur yesterday.
At present, Exim Bank is the sole trade credit takaful provider in Malaysia and the product is only available internally.
Mohd Zabidi urged takaful operators in the country to venture into this under-tapped market as it provides tremendous business opportunities and growth potential.