Page 368 - Bank Muamalat_AR24

366 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, BMMB 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 optimize 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

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