Page 72 - EXIM-Bank_Annual-Report-2022

A VISION COMMITMENT EMPOWERING ENSURING ENHANCINg FINANCIAL
70 EXIM BANK MALAYSIA ANNUAL REPORT 2022 TO SERVE TO LEAD GROWTH SUSTAINABILITY gOVERNANCE STATEMENTS 71

DISCLOSURE ON

SHARIAH GOVERNANCE

EXIM Bank offered Islamic financing facilities alongside its conventional business
facilities in meeting cross-border business requirements. The conduct of Islamic
financing business by EXIM 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.

Shariah governance of EXIM Bank is bound to follow requirements as stipulated under BNM’s Shariah Governance Policy Document
(SGPD). EXIM Bank’s Shariah governance provides a sound and robust Shariah compliance framework of EXIM Bank vis-a-vis
the Board of Directors’ (the Board) oversight accountability over Shariah governance, the Management’s responsibility over
day-to-day EXIM Bank’s business, operations, affairs and activities and an independent Shariah Committee responsibility supported
by a secretariat function 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

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

Duties & Responsibilities

Shariah Committee 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. Specifically, the functions and responsibilities
of the Shariah Committee 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 SNC finding by any relevant functions and endorsing a rectification measure to address a Shariah non-compliance
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 Shariah Committee must take into account
relevant business and risk practices in arriving at a decision or advice.

6. In the event where the Shariah Committee 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 Shariah Committee decision or advice;

ii) ascertain the Board’s views on the decision or advice made by the Shariah Committee with regards to the SAC ruling; and
iii) ensure immediate notification to the BNM of such decision or advice.