9. INVESTMENT ACCOUNT (CONTINUED) 9.1 Overview (continued) Wakalah refers to a contract where a customer, as the principal, authorises the Group as his agent to perform a particular task on matters that may be delegated i.e., investment, with or without imposition of a fee. In this context, the Shariah contract applied is Wakalah bi al-istithmar (Wakalah for the purpose of investment). In terms of offering, the Group currently has the following two categories of IA: Unrestricted Investment Account (UA) Restricted Investment Account (RA) Unrestricted Investment Account refers to a type of inves tment account whereby the cus tomer/ Investment Account Holder (IAH), without specifying any particular restrictions or conditions, provides the Group with the mandate to make the ultimate decision to invest. Restricted Investment Account (RA) refers to an IA where the IAH provides a specific investment mandate to the Group. IA product is not capital guaranteed and is not protected by the Perbadanan Insurans Deposit Malaysia (PIDM). Among the risks associated with IA include but not limited to the following: • • Market risk – the risk arising from the potential impact of adverse price movements on the economic value of an asset. • • Credit risk – the risk arising from the potential that the Bank fails to meet its obligations to IAH in accordance with agreed terms and conditions. • • Liquidity risk – the risk arising from the potential loss for IAH where there are lesser return and possible capital erosion or loss. • • Operational risk – the risk arising from the potential loss resulting from inadequate or failed internal processes, people and systems or external events. • • Legal risk – IAH should ensure that, in entering into this investment it is not in breach of any laws, regulations, contractual or any other legal limitations that may apply to investors. This investment is issued subject to all applicable laws, regulations and guidelines. In the event of change in such laws, regulations or guidelines, Bank Islam may be obliged to change some or all the terms and conditions of the investment, including the possibility of an early termination. • • Shariah non-compliance risk – the risk arising from possible failures to meet the obligation to Shariah principles or in other words, possible incident of Shariah non-compliances. INTEGRATED ANNUAL REPORT 202 1 431 Key Messages Overview Value Creation MD&A Sustainability Leadership Accountability Financial Additional Information
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