Page 105 - Exim iar24_Ebook

EXIM BANK MALAYSIA ANNUAL REPORT 2024

7 FINANCIAL STATEMENTS 103
SHARIAH COMMITTEE’S REPORT

SHARIAH COMMITTEE’S RESPONSIBILITY (cont’d)
During the financial year, there were sixteen (16) meetings held by the Shariah Committee of the Bank in which we reviewed and
deliberated on, among others; the Bank’s Islamic banking and takaful products, operational processes, guidelines and manuals
relating to Shariah compliant transactions which were presented to us by the Bank. In performing our roles and responsibilities,
we had obtained the information, reports and explanations which we considered necessary to provide us with sufficient evidence to
give reasonable assurance that the Bank has complied with Shariah.

The Shariah Committee has provided appropriate advice on various aspects of the Bank’s Islamic business operations to ensure
compliance with applicable Shariah rules and principles as well as the relevant resolutions and rulings made by the Shariah Advisory
Council (“SAC”) of BNM.

SHARIAH & SOCIAL FINANCE DEPARTMENT
SSFD’s primary mandate is the Secretariat to the Shariah Committee of the Bank. SSFD has the responsibility to provide the
operational support for effective functioning of the Shariah Committee, including; coordinating communications and disseminating
information among the Shariah Committee, the Board of Directors (“Board”) and its committees as well as senior management;
performing in-depth research and studies on Shariah issues; providing day-to-day advice to relevant parties within the Bank on
Shariah matters based on the rulings of the SAC and decisions or advice of the Shariah Committee; ensuring proper dissemination
of decisions or advice of the Shariah Committee within the Bank and undertaking administrative and secretarial functions to support
the Shariah Committee.

CONTROL FUNCTIONS

a. Shariah Risk Management
Shariah Risk Management (“SRM”) refers to a function that systematically identifies, measures, monitors and reports SNC risks
in the operations, business, affairs and activities of the Bank.
The management of SNC risk is executed through the three (3) lines of defence. The three (3) lines of defence are: First - the
business units and functional lines; Second - Shariah Risk and Shariah Review; Third - Shariah Audit.

During financial year 2024, the Bank had continuously enhanced the implementation of robust control measures in managing its
SNC risk in line with the risk appetite strategy and metrics as approved by the Board. For effective SRM function, the Governance,
Risk, and Compliance (“GRC”) System is used to facilitate the Shariah risk profiling exercise, which includes the Risk and Control
Self-Assessment (“RCSA”), Key Risk Indicator (“KRI”), Key Control Testing (“KCT”), and Loss Event Database (“LED”).
b. Shariah Review & Shariah Audit

In ensuring that the Bank’s Islamic business activities are conducted in conformity with the Shariah rules and in accordance with
the regulatory requirements, the Bank’s Shariah Review has regularly assessed and evaluated the Bank’s business activities,
product features and service offered by the Bank whilst Shariah Audit provides its independent assessment and assurance on
overall effectiveness of Shariah internal control system to ensure compliance of the Bank’s operations, business, affairs, and
activities with Shariah.
During the year, Shariah Committee has assessed the work carried out by Shariah reviewer and provide insights from Shariah
perspective to the Shariah auditor. Their reports were deliberated in the Shariah Committee meeting, where the findings become
the basis for the Shariah Committee to form an opinion on its compliance with Shariah rules and principles, Shariah guidelines
and rulings issued by the SAC of Bank Negara Malaysia as well as Shariah decisions and resolutions made by the Shariah
Committee.