8. SHARIAH GOVERNANCE (CONTINUED) 8.2 Shariah Risk Management (continued) Extensive and continuous Shariah risk awareness initiatives have been conducted for the Group’s staff and Risk Controllers (“RC”) to ensure understanding towards Shariah requirements/rulings, effective identification of SNC risks, establishment of controls to prevent SNC event, and to keep updated on the latest Shariah requirements/ rulings issued by Shariah Division, SSC and regulators, and any occurrence of Shariah non-compliance event. In the year 2022, five (5) Shariah risk awareness sessions were conducted involving Bank’s staff from HQ and branches. In addition, it is compulsory for all staff to participate in Shariah training via e-Learning as a refresher course. 8.3 Shariah Non-Compliance (“SNC”) Events An SNC event is a result of the Group’s failure to comply with the Shariah rules and principles as determined by the Bank’s Shariah Supervisory Council, as well as other relevant body or institution such as the Shariah Advisory Council of BNM, Securities Commission and Labuan Financial Services Authority. Throughout the year 2022, there were three (3) incidences of SNC events, whereby the events were related to improper execution of aqad for deposit-based product, granting of financing facilities to a company with SNC activities and absence of commodity trading for Tawarruq-based deposit. To prevent similar recurrence, the Group is continuously improving its Shariah compliance culture through the issuance of reminders, conducting on-going awareness trainings, as well as establishing additional controls to ensure compliance with Shariah requirements. 8.4 Shariah Non-Compliant Income 31 December 2022 31 December 2021 RM 39,312.59 RM41,182.96 The main contributors of the SNC income for 2022 were commissions from SNC merchants of card business (RM22,055.73) and commissions from third party investment product offering (RM17,132.03). The amount was disposed to charitable causes upon SSC’s approval. All SNC events and rectification plans were presented and approved by the Board/ SSC and reported to BNM in accordance with the prescribed reporting requirement by the regulator. 9. INVESTMENT ACCOUNT 9.1 Overview Islamic Financial Services Act 2013 (“IFSA”) distinguishes Investment Account (IA) from Islamic deposits, where Shariah contracts that need to be applied for IA products are non-principal guaranteed, while Shariah contracts for deposit products are principal guaranteed. In line with the implementation of the IFSA, the Group has developed investment account products based on Mudarabah and Wakalah contracts. Mudarabah is a contract between a customer as capital provider and the Group as an entrepreneur under which the customer provides capital to be managed by the Group and any profit generated is shared according to a mutually agreed profit-sharing ratio (PSR) whilst financial losses are borne by the customer provided that such losses are not due to the Group’s misconduct, negligence or breach of specified terms. Pillar 3 Disclosure as at 31 December 2022 Integrated Report 2022 438
RkJQdWJsaXNoZXIy NDgzMzc=