During this seminar, Dr. Thaweelap Rittapirom, Director and President of the Islamic Bank of Thailand, was invited to the stage to share experiences regarding the role and operations of the Islamic Bank of Thailand in sustainable development, specifically focusing on promoting Halal investment with ESG (Environmental, Social, and Governance) criteria. The seminar brought together SME entrepreneurs, regulatory agencies, researchers, and industry leaders in the Halal sector, as well as interested individuals from various countries, with approximately 500 participants, at the Malaysia International Trade & Exhibition Centre (MITEC) in Kuala Lumpur, Malaysia.
"Over the past 20 years, the Islamic Bank of Thailand has faced numerous challenges in becoming the sole financial institution in Thailand to provide financial services in accordance with Shariah principles (Islamic principles.) The Bank has carved out a clear niche market and maintained a balanced approach between its role as a state-owned bank and its business
growth aspirations. The Thai government has consistently supported the Bank by increasing its capital, and the Ministry of Finance now holds almost 100% of the Bank's shares. This support aims to ensure that the Muslim community in Thailand has access to a Halal-compliant banking service that adheres to the tenets of their faith. The Bank has a widespread network of branches across the country, with approximately half of them located in the southern region. These branches primarily serve Muslim customers and offer comprehensive financial services, including deposit accounts, financing, Takaful insurance, and more." - Dr. Thaweelap said.
During the seminar, Dr. Thaweelap presented and exchanged experiences on applying ESG principles. In summary,
Being backed by Shariah principles as its foundation, the Islamic Bank of Thailand envisions itself as a 'financial institution that provides services according to Shariah principles for sustainability.' The fact that the Bank offers services in accordance with Shariah principles has led to the adoption of ESG concepts even before the emergence of ESG as a prominent idea. When we discuss Shariah principles and ESG, it becomes apparent that both these principles share common ground in terms of transparency, fairness, and a shared goal of achieving positive societal outcomes. By integrating both Shariah principles and ESG into business operations, it can lead to the establishment of a resilient and sustainable business."
Over the past year, the Bank has consistently supported projects and initiatives that prioritize ESG principles. Some examples include:
In terms of Environmental initiatives, the Bank has implemented a policy not to support businesses engaged in environmental destruction since 2022. Additionally, it has provided
credit support to businesses in the renewable energy sector, promoting the use of clean energy sources instead of fossil fuels. This includes projects such as solar power plants and biomass power plants that generate renewable energy while fostering sustainable community engagement. Furthermore, the Bank has extended credit facilities to electric motorcycle and electric truck dealers to reduce greenhouse gas emissions and various pollutants. It has also approved special profit rates for private religious schools to install solar panels, enabling significant monthly electricity cost savings.
In the realm of Social responsibility, managing Zakat (Islamic almsgiving) is a specified mission outlined in the Islamic Bank of Thailand Act. It serves as a tool for alleviating poverty and reducing social disparities within the Muslim community. The Bank provides services to customers who are required to pay Zakat and distributes these funds to those in need, thereby improving their quality of life sustainably. Al-Ameen Program (The Honest Community Credit) is another project through which the Bank collaborates with community leaders. It aims to provide honest individuals in the community who lack access to conventional financial institutions with an opportunity to develop their livelihoods without relying on external debt.
Furthermore, the Bank has financed hospitals in three southern border provinces to enhance healthcare access in the region. It also caters to the elderly population and ensures that people in the area and nearby regions receive healthcare services of a standard that is accessible to all.
Good Governance, the Bank focuses on the needs and expectations of key stakeholders to the Bank's operations and management. It sets policies, directions and guidelines for the organizational development so that executives and employees can operate directly to targets. Continuing to create new products and services to meet the customer's needs. Ensure the
effectiveness of risk management and internal control to reduce the negative impact on shareholders as well as regulators. Beside, building relationships with the community to make the operation smooth. In addition, the Bank creates a transparent corporate culture, has an anti-corruption policy and has integrity in its own work. Therefore, good governance is considered the most important in the ESG principle.
Roles of Islamic Bank of Thailand toward Halal Industry in Thailand
The Halal economy in Thailand has the potential to grow continuously. Islamic Bank of Thailand is a financial institution that provides Halal sources of funding to make the whole production processes are Halal. The Bank works with many organizations such as The Central Islamic Council of Thailand, Halal Institute of Prince of Songkla University and EXIM Bank to support entrepreneurs to get Halal certification, promoting research and development to upgrade Thai's Halal products and services to meet international standards and facilitating their access to global markets.
"Given the ever-changing global landscape and its continuous impact on the economic environment, entrepreneurs should plan to adapt their business strategies. This adaptation should go hand in hand with the incorporation of ESG principles to ensure sustainable long-term growth for their organizations." - Dr. Thaweelap Rittapirom said.
Source: Islamic Bank of Thailand