Page 437 - Bank-Muamalat_Annual-Report-2023

ANNUAL REPORT 2023
OUR NUMBERS

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 26: ORM minimum capital requirement

31 December 2023 31 December 2022
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 1,508,264 120,661 1,463,122 117,050
Bank 1,483,198 118,656 1,427,083 114,167

10.0 SHARIAH GOVERNANCE DISCLOSURES
Overview
Bank Muamalat’s shariah governance structure is governed by BNM’s Shariah Governance Policy Document (“SGPD”),
the Islamic Financial Services Act 2013 (“IFSA”), and any related guidelines issued by the authorities, subject to variations
and amendments from time to time.

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

The SGPD defines “Shariah non-compliance risk” as the risk of legal or regulatory sanctions, financial loss or non-financial
implications including reputational damage, which an IFI may suffer arising from failure to comply with the rulings of
the Shariah Advisory Council (“SAC”) of BNM, standards on Shariah matters issued by BNM pursuant to section 29(1)
of the IFSA, or decisions or advice of the Bank’s Shariah Committee (“SC”).
Shariah risk management and governance in Bank Muamalat are in accordance with the Shariah Governance Policy
(“Policy”), which was 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 Department, Shariah Audit, Shariah Review and Shariah Risk Management.

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