Bank Islam Integrated Annual Report 2020

SHARIAH NON-COMPLIANT EVENTS & INCOME Throughout 2020, we confirmed one (1) incidence of Shariah non-compliance event i.e.Foreign Outward Telegraphic Transfer (“FOTT”) service provided for a potential Shariah non-compliant purpose. We were also informed on the causes of the incidence and noted that the Bank has taken corrective as well as preventive measures in order to avoid the same incidence from occurring in the future. We also confirmed that the SNC event together with the rectification plan were presented to the Board of Directors and us and reported to BNM in accordance with the reporting requirement prescribed by the regulator. Within the financial year, the Bank has collected Shariah non-compliant income amounting to RM59,960.46. A total of RM52,332.96 from the collected amount was purified and disposed to charitable causes upon our approval as further described in Note 23 (Sources and Uses of Charity Fund). BUSINESS ZAKAT In the financial year, the Bank has fulfilled its obligation to pay zakat on its business to state zakat authorities by adopting the growth capital computation method, in compliance with the Manual Pengurusan Zakat Perbankan issued by Jabatan Wakaf, Zakat dan Haji (“JAWHAR”). The Bank paid the zakat on the Bank’s portion i.e. shareholders’ fund as well as other funds received by the Bank exclusive of depositors’ fund and Investment Account holders’ fund. Several zakat authorities had mandated distribution of a portion of the zakat paid by the Bank on the based on their agent (wakil) for distribution to eligible beneficiaries (asnaf) as guided by the Business Zakat Guideline that was approved by us. SAFEGUARDING THE INVESTMENT ACCOUNT HOLDERS (“IAH”) INTEREST In ensuring that the interest of IAH is protected, we confirmed that the profit allocation for the IAH is in accordance with Shariah rules and principles where the profit computation formula has been duly presented and approved by us. The performance of the Investment Account has also been disclosed and reported via issuance of Fund Performance Report (“FPR”), which was already made available on the Bank’s website. SADAQA HOUSE INITIATIVE In protecting the interest of Sadaqa House donors, we confirmed that the fund management and distribution of Sadaqa House are in accordance with Shariah rules and principles. We have approved the Sadaqa House Management Guideline that governs the conduct and management of Sadaqa House fund to ensure Sadaqa House operates in line with Shariah rules and principles. The Sadaqa House and Zakat Committee that is chaired by the General Manager, Strategic Relations has been mandated to oversee the conduct of the Sadaqa House initiative to be in line with Shariah rules and principles in accordance with the Sadaqa House Management Guideline approved by us. We had also reviewed the financial statement of the Bank and confirmed that the financial statement complies with the Shariah rules and principles. BANK ISLAM MALAYS IA BERHAD INTEGRATED ANNUAL REPORT 2020 183