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ANNUAL REPORT 2021 65

DISCLOSURE ON
SHARIAH GOVERNANCE

EXIM Bank offers Islamic financing facilities alongside conventional business facilities in meeting
cross-border business requirements. The conduct of Islamic financing business by the Bank is
regulated mainly by the relevant provisions in the Development Financial Institutions Act (“DFIA”)
2002 and governed by regulations issued by Bank Negara Malaysia (BNM) from time to time.

The Bank’s Shariah governance is bound to follow requirements as stipulated under BNM’s
Shariah Governance Policy Document (SGPD). It provides a sound and robust Shariah compliance
framework vis-a-vis the Board of Directors’ (the Board) oversight over Shariah governance, the
Management’s responsibility over day-to-day business operations, the independent Shariah
Committee’s responsibility, and secretariat support by the Shariah Management Department to
serve the Shariah Committee and Shariah control functions in managing Shariah non-compliance
risk through Shariah risk management, Shariah review and Shariah audit functions.

SHARIAH COMMITTEE (SC)

While the Board is ultimately accountable for the overall Shariah governance implementation and Shariah compliance of EXIM Bank,
the Board is advised and guided by the SC on Shariah matters in relation to the Islamic finance business of the Bank.
Duties & Responsibilities

The SC has the responsibility to provide objective and sound advice to EXIM Bank to ensure that its aims and operations, business,
affairs and activities are conducted in compliance with Shariah.

The specific functions and responsibilities of the SC are, inter alia:
1. To provide a decision or advice to the Bank on the application of any rulings of the Shariah Advisory Council (SAC) of BNM or
standards on Shariah matters that are applicable to the operations, business, affairs and activities of the Bank;

2. To provide a decision or advice on the operations, business, affairs and activities of the Bank which may trigger a Shariah
non-compliance (SNC) event;

3. To deliberate and affirm SNC findings by any relevant functions and endorse rectification measures to address the SNC event.
4. To be accountable for the quality, accuracy and soundness of its own decision or advice.

5. To establish a robust methodology to guide its decision-making process. The SC must take into account relevant business and
risk practices in arriving at a decision or advice.

6. In the event where the SC decides or advises to place additional restrictions on the operations, business, affairs and activities of
the Bank in applying the SAC rulings, the Bank must:

i) Document the deliberations and justifications of the SC’s decision or advice;
ii) Ascertain the Board’s views on the decision or advice made by the SC with regards to the SAC ruling; and

iii) Ensure immediate notification to the BNM of such decision or advice.