OCBC Al-Amin Bank Berhad (OCBC Al-Amin), the Islamic banking subsidiary of OCBC Bank (Malaysia) Berhad (OCBC), has extended a pioneering USD175 million Islamic green term financing facility to RHB Islamic Bank Berhad (RHB Islamic).

The facility makes OCBC Al-Amin the first to offer a green Islamic foreign currency and bank-to-bank term financing facility. The facility is also the first to feature a pioneering Islamic term financing using the use-of-proceeds approach in the financial institutions space in Malaysia. RHB Islamic will use the green Islamic financing facility to provide its customers with end-to-end ESG financing solutions in alignment with RHB Banking Group’s sustainable asset framework.

The “Islamic green term financing” pertains to financing that adheres to Shariah requirements and promotes bank-to-bank green financing that utilises the use-of-proceeds method in applying financing proceeds directly to targeted economic segments in an environmentally and socially responsible manner

The term financing is embedded with an Islamic cross-currency swap arrangement, which provides a Shariah-compliant hedging mechanism that protects against currency market fluctuations.

OCBC Al-Amin and RHB Islamic pioneer USD175 million Islamic Green Term Financing (L-R): Mr Chai Choong Hin, Head, Group Trading, Group Treasury & Global Markets, RHB Bank Berhad; Ms Sarita Sharma, Head, Legal & Governance, Group Treasury & Global Markets, RHB Bank Berhad; En Abdul Halim B Abdol Razak, Head, Group Funding & Liquidity Management, Group Treasury & Global Markets, RHB Bank Berhad; En Angus Salim Amran, Group Treasurer, RHB Bank Berhad; Dato' Adissadikin Bin Ali, CEO, RHB Islamic Bank Berhad; Tuan Syed Abdull Aziz Syed Kechik, CEO, OCBC Al-Amin Bank Berhad; En Mohd Kamal Bin Abdul Karim, Head, Islamic Product & Business Development, OCBC Al-Amin Bank Berhad; Mr Voon Yee Fong, Head, Global Financial Institutions, OCBC Bank (Malaysia) Berhad; En Mohd Hisham Bin Ramli, Head, Islamic Product, OCBC Al-Amin Bank Berhad; and Puan Rozita Bt Ismail, Head, Business Development, OCBC Al-Amin Bank Berhad

According to OCBC Al-Amin CEO Tuan Syed Abdull Aziz Syed Kechik the term financing extended to RHB Islamic is a landmark facility in both the country and the Bank’s journey toward achieving the ideals of the Islamic banking industry’s sustainability agenda and value-based intermediation, in line with Bank Negara Malaysia’s Financial Sector Blueprint 2022-2026.

“We are pleased to collaborate with RHB Islamic on this significant Shariah-compliant financial solution for the country and will continue to look to strengthen our green efforts, working closely with our industry peers to achieve net-zero decarbonisation in Malaysia by 2050,” he said.

Managing Director of RHB Islamic, Dato’ Adissadikin Ali, said, “The Shariah-compliant Green Term Financing facility aligns with RHB Islamic’s core values of responsible and ethical banking and commitment to upholding the value-based intermediation (VBI) principles and RHB Banking Group’s Environmental, Social and Governance (ESG) principles. It also supports our Sustainability Strategy and Roadmap, particularly our aspiration to develop a Pathway to Net Zero by 2050.

“Through this innovative financial solution, we aim to serve our clients and business partners’ needs by empowering them with more green financing options that offer competitive rates. Together with OCBC Al-Amin, we believe we can effect positive environmental stewardship and social responsibility in the global financial landscape.”

Last year, Singapore-based OCBC Group and RHB Banking Group entered into partnership on two sustainability-linked solutions featuring a 2-year S$150 million sustainability-linked loan and cross currency swap between OCBC Group with RHB Bank Malaysia, and a S$100 million sustainability-linked loan to RHB Bank Singapore.

Since its establishment in December 2008, OCBC Al-Amin has remained among the top foreign Islamic banks in Malaysia, consistently placed among the top two in terms of assets since 2013.

OCBC Al-Amin offers its products and services through the 38 OCBC branches nationwide, including 7 that are standalone Islamic banking branches.