Affin Bank Berhad | Annual Report 2020

204 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL ORGANISATION EXECUTIVE SUMMARY CORPORATE GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION SHARIAH SUPERVISION AND COMPLIANCE FRAMEWORK a. The Shariah Committee (“SC”) of the respective subsidiaries are responsible for overseeing all Shariah matters of the Group. The Shariah Committee, amongst others, ensures that the Shariah rulings relating to Islamic banking and products and services comply with the fundamental Shariah precepts and resolutions by the relevant Shariah authorities. b. Shariah Committee acts as an adviser on Shariah matters to all business and support units within the subsidiaries in carrying out their Islamic financial activities. The Shariah Supervision and Compliance Framework (“SSCF”) is the enterprise-wide Shariah management plan consisting of Shariah governance mechanisms to be undertaken by relevant sections across the Group. The implementation of the SSCF is in line with BNM’s requirements effected through the following functions at the subsidiaries: • Shariah Research – The Shariah Research comprises qualified Shariah officers who conduct the pre-product approval process, research, vetting of issues for submission and undertake administrative duties relating to the Shariah Committee. • Shariah Review – The Shariah Review comprising of qualified Shariah officers, is responsible for conducting the Shariah compliance review function. – The Shariah Review has established procedures manual which sets out the Shariah compliance review function, encompassing regular assessment on Shariah compliance in the activities and operations of the subsidiaries, including examining and evaluating the level of compliance to the Shariah, remedial rectification measures to resolve non-compliances and control mechanisms to avoid recurrences. • Shariah Risk Management – Shariah Non-Compliance (“SNC”) risk is identified as one of the material risks under its Islamic banking business. In this regard, Affin Bank Group has established a dedicated Shariah Risk Management team to facilitate a systematic and consistent approach in managing SNC. • Shariah Audit – Group Internal Audit Division provides independent assurance on the efficiency and effectiveness of the internal control systems and related policies and procedures implemented by management governing Islamic products and services. Findings related to Shariah products and services including SNC risk are reported to the Shariah Committee of the respective subsidiaries and GBAC.