Page 417 - Bank Muamalat_AR24

ANNUAL REPORT 2024 1 2 3 4 5 6 7 Our Numbers 8 415

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 ( 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 2024 31 December 2023
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 1,559,285 124,743 1,508,264 120,661
Bank 1,549,255 123,940 1,483,198 118,656

10.0 SHARIAH GOVERNANCE DISCLOSURES

Overview
BMMB’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
organizational 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 BMMB 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.