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416 BANK MUAMALAT MALAYSIA BERHAD About Us Our Leadership Our Strategy
ANNUAL REPORT FY2020

BASEL II
PILLAr 3 DISCLOSurE

9.0 OPErATIONAL rISk MANAGEMENT (“OrM”) DISCLOSurES (CONT’D.)
OrM Minimum Capital requirement

The Group and the Bank adopt the Basic Indicator Approach (“BIA”) to determine the minimum capital requirement for
its operational risk. Under this approach, the Group and the Bank set aside a fixed percentage (a or alpha factor) of 15% of
positive annual average gross income, averaged over the previous three years. The Group’s and the Bank’s minimum capital is
presented in table below:
Table 27: OrM minimum capital requirement
31 December 2020 31 December 2019
Minimum Minimum
risk Capital risk Capital
weighted requirement weighted requirement
Assets at 8% Assets at 8%
rM’000 rM’000 rM’000 rM’000

Group 1,259,314 100,745 1,218,544 97,484
Bank 1,250,046 100,004 1,206,121 96,490

10.0 ShArIAh GOvErNANCE DISCLOSurES

Overview
BMMB’s shariah governance structure is governed by BNM’s guidelines on Shariah Governance Policy Document (“SGPD”),
and any related guidelines issued by the authorities, subject to variations and amendments from time to time.

Shariah governance system as defined by the IFSB Guiding Principles on Shariah Governance System on Institutions Offering
Islamic Financial Services (“IFSB-10”) refers to a set of institutional and organizational arrangements to oversee Shariah
compliance aspects in Islamic financial institutions (IFI).

In this context, Shariah non-compliance risk has been defined as “the risk that arises from the Group’s and the Bank’s failure
to comply with the Shariah rules and principles determined by the Shariah Committee (“SC”) of BMMB and relevant Shariah
Authorities (“SA”) committees.
Shariah risk management and governance in BMMB are in accordance with the Policy on Shariah Governance (“Policy”), which
is endorsed by the Shariah Committee and approved by the Board. The Policy is drawn up in accordance to the SGPD issued
by BNM on 20 September 2019.
In ensuring the operations and business activities of the Bank remain consistent with Shariah principles and regulatory
requirements, the Bank has established its own internal Shariah Committee and internal Shariah Organs, which consist of
Shariah Division, Shariah Audit, Shariah Review, and Shariah Risk Management.