Page 388 - Bank-Muamalat_Annual-Report-2023

BANK MUAMALAT MALAYSIA BERHAD

BASEL II
PILLAR 3 DISCLOSURE

3.0 RISK MANAGEMENT
Overview

Risk is inherent in every aspect of our business activity and to manage this effectively, Bank Muamalat has undertaken
an integrated risk management approach to ensure that a broad spectrum of risk types are considered and addressed.
The Bank’s risk management framework and structure are built on formal governance processes that outline responsibilities
for risk management activities, as well as the governance and oversight of these activities.
An integral part of this approach is the systematic process of risk identification and measurement. Appropriate risk
management strategies are then developed in line with the Bank’s business plans and objectives, which include the
ongoing monitoring and control of the identified risk exposures. The management and control over the principal risk
areas of credit, market, asset and liability management, operational and Shariah are integrated to optimise and secure the
Bank’s strategic and competitive advantage.
Risk Governance

The Board of Directors holds the ultimate responsibility for the overall risk governance and oversight. This includes
determining the appropriate risk strategies, setting the Bank’s risk appetite and ensuring that the risks are monitored
and controlled effectively. The Board oversees the risk management of the Bank through a clearly defined governance
structure, which include board and management level committees with distinct roles and responsibilities.
Table 5: Risk Governance Structure

INDEPENDENT
RISK GOVERNANCE STRUCTURE OVERSIGHT &
ASSURANCE

Board of Directors
BOARD Establish Risk Appetite & Policies Board Risk Management Committee (Veto) Board Compliance Committee (SC)

Shariah
Veto
Committee (BCC)
Committee (BRMC)
Board Audit
Committee
(BAC)
Executive Risk Management
Asset Liability
Credit
Investment
Committee (CC)
Committee (ERMC)
SENIOR MANAGEMENT Ensure Implementation of Policies & Compliance Enterprise Risk Operational Risk Committee (ALCO) Asset Quality Committee Committee (IC)
Credit Risk
Business Continuity
Model
Management
Impaiement
Validation
Management
Management
Management
Committee
Committee
Committee
Committee
Committee
(CRMC)
(MVAC)
(BCMC)
(ORMC)
(ERMCo)
(AQIC)
Risk Management Department
MIDDLE MANAGEMENT LEVEL Implement & Comply with Risk Policies Regulatory Advisory Compliance Technology & Cyber Risk Department Credit Management Department Internal Audit
Division
(RMD)
(TCRD)
(CMD)
(IAD)
Bank’s Line
Shariah Department
Management/Risk Agent
Division (RACD)
(SR)
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