A fundamental requirement of an Islamic financial institution is that its whole business practices and operations are based on Shariah rules and principles. Islamic finance derives its value proposition from the application of Shariah contracts in financial transactions that provide for different risks and return profile. Adherence to Shariah principles under such distinct contract preserves the validity and sanctity of any Islamic financial transactions. As such, BIMB Holdings is committed to upholding these principles via strict observance of the Shariah Governance Framework.
As outlined by Bank Negara Malaysia, the general requirements of the Shariah Governance Framework can be summarised into the following:
(i) It is the duty and responsibility of an Islamic Financial Institution (IFI) to establish a sound and robust Shariah governance framework with emphasis place on the roles of key functionalities in ensuring effective implementation of Shariah governance framework;
(ii) An IFI shall set out the accountability and responsibility of every key functionary involved in the implementation of Shariah governance framework;
(iii) Independence of the Shariah Commitee shall be observed at all time in exercising their duties to make objective and informed judgement;
(iv) Any person bearing responsibilities outlined in the Shariah governance framework for an IFI shall possess the necessary competency and continuously enhance their knowledge and understanding on the Shariah as well as keep abreast on the latest developments in Islamic finance;
(v) Internal and privileged information obtained by the Shariah Committee members in the course of their duties shall be kept confidential at all times and shall not be misused;
(vi) Professional ethics, judgement and consistency shall be maintained in ensuring Shariah compliance;
(vii) There shall be a robust Shariah compliance function, comprising review and audit functions, supported by risk management control process and internal research capacity.