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EXIM BANK MALAYSIA ANNUAL REPORT 2024

6 UPHOLDING ACCOUNTABILITY 77
DISCLOSURE ON SHARIAH GOVERNANCE

EXIM Bank offers Shariah compliant products and services, including Islamic financing and takaful 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.

EXIM Bank’s Shariah compliance businesses are being well guided by robust Shariah governance infrastructure, policies and
procedures aligned with BNM’s Shariah Governance Policy Document (SGPD). The Bank ensures compliance through oversight
from the Board of Directors (the Board), day-to-day management responsibilities, and support from an independent Shariah
Committee and its secretariat. The framework manages Shariah Non-Compliance (SNC) risk through various functions like
Shariah risk management, Shariah review, and Shariah audit.

SHARIAH COMMITTEE

Shariah Committee is responsible for providing objective and sound advice to EXIM Bank, ensuring that its aims and operations,
business, affairs, and activities comply with Shariah requirements. While the Board holds ultimate responsibility for Shariah
governance and compliance, it relies on the Shariah Committee’s expertise and guidance in all matters related to Islamic finance,
reinforcing the Bank’s commitment to Shariah integrity and governance excellence.
Duties & Responsibilities

Specifically, the functions and responsibilities of the Shariah Committee are, inter alia:
1. Providing decision or advice to the Bank on the application of any Shariah Advisory Council (“SAC”) of BNM rulings or
standards on applicable Shariah matters for the operations, business, affairs and activities of EXIM Bank.

2. Providing a decision or advice on the operations, business, affairs and activities of the Bank which may trigger a SNC event
and to be accountable for the quality, accuracy and soundness of its own decision or advice.

3. Deliberating SNC finding from any relevant functions and endorsing rectification measures for SNC events.
4. Establishing 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.

5. In the event where the Shariah Committee recommends additional restrictions in applying SAC rulings, EXIM Bank will:
i. Document the Shariah Committee’s decision-making process and rationale;
ii. Seek the Board’s perspective on the Shariah Committee’s decision regarding SAC rulings;
iii. Promptly inform BNM of any such decisions or advice.
6. Shariah Committee have rights to delegate some of its functions to any department in EXIM Bank in endorsing and validating
products guidelines, marketing advertisement, sales illustrations and brochures for EXIM Bank’s products and services,
as well as delegating its power and authority to EXIM Bank’s Shariah control functions in reviewing the level of Shariah
compliance, particularly with regards to the actual implementation and operation of EXIM Bank’s Islamic financial contracts.
When delegating Shariah Committee responsibilities, the following procedure will be followed:

i. Areas of delegated authority by the Shariah Committee and operating procedures are set out clearly in EXIM Bank’s internal
policies.
ii. Reporting arrangements are established to keep the Shariah Committee informed of the work, key deliberations, and
decisions on delegated matters.
iii. The Shariah Committee remains fully accountable for the decisions and any ensuing implications arising from the
delegated responsibility.