4.

0 ANALYSIS THE RISK INVOLVED AND TOOLS USED BY THE BANK FOR
MANAGING, MATIGATING AND HEDGING AGAINST MENTION RISKS IN BANK
ISLAM MALAYSIA BERHAD (BIMB)

Risk is generally recognized as one of the components that determine and jolt an
enterprise's behavior. Risk entails both asset value vulnerability and earning growth
times. Risks include credit risk, market risk, operational risk, and liquidity risk, to
suggest a few. Based on these apprehensions, the distribution of risk related with
each firm varies corresponding to the corporation. For illustration, in the banking and
finance industry, where the essential organization is contributing and keeping cash,
bond risk and liquidity risk may be loftier. The rose the value of money lent by a bank
to a customer, the increased the credit risk that a bank or financial institution must
bear, and another part is the manufacturing industry. Companies whose primary
business is producing may allow greater operational risk. Credit risk, market risk,
operational risk, and liquidity risk are the risks I'd like to discuss.

4.1 Credit Risk

    Risk of livelihood or major loss arising from an obligor's defeat to find its fiscal
commitments on sign-upon conditions.

    It arises when borrowers or counterparties fail to find statutory commitments at

Bank Islam Malaysia Berhad (BIMB). One case is when borrowers fail to carry out a
mortgage principal or benefit fee. Mortgages, credit cards, and adjusted income
securities are all affected to delinquency. Failure to satisfy statutory commitments
can still arise in sectors such as derivatives and required guarantees. While banks
cannot be totally guarded from credit risk expected to the type of their organization,
they can ease their vulnerability in a mixture of conditions. Because deterioration in a
corporation or issuer is often unreliable, banks cut their risk by expanding. Banks are
less prone to be overexposed to a group with considerable losses if they make this
during a credit deterioration. They can cut down their risk liability by providing cash
to communities with perfect credit records, transacting with strong-quality
counterparties, or owning collateral to rear up the loans.
   While banks are not exempt to accept risk owing to the way of their business
designs, Bank Islam Malaysia Berhad (BIMB) can reduce their compromise in a kind
of ways.  Because downturns in activities or businesses are often incomplete, BIMB
diversify their risk. To have credit defaults and losses within the Permissible Risk
selection, BIMB keep accurate and proper credit risk behaviors and specifies in
store. Prior to resignation to authority and Board Committees for confirmation, credit
analysts independently evaluate and constructively challenge business credit
assessments. To judge and validate asset eligibility requirements, periodic
independent post-credit reviews and post-moterm analysis are given.This includes
portfolio risk appraisal and accurate control. All publications and non-conformities,
including energising risks, are addressed to executive and board panels.

4.2 Market risk

    The risk of losses in on-balance plate and over-balance sheet stands as an end of
advertising value/rate movements Risk of losses in on-balance plate and over-
balance sheet positions owing to retail value/rate variations.

    Currency and equities price risks, for illustration, would take place under the
precise group in Bank Islam Malaysia Berhad, but price change in goods or assets
the bank transactions with would fail under specific market risk.

    BIMB solve the obstacle by have a steady market risk policy and limitations in
rank based on best practises market risk is conducted within the established Risk
Appetite through proactive control, investigation, and publishing. In checking with the
overall economic position, a proactive evaluation of all market risk criteria is
presented. Limits or executive action triggers are considered on a daily base to
provide that risk is adequately carried out. Management and Board Committees are
warned of any risks and non-compliance.

4.3 Operational Risk

     The risk of loss as a result of inadequate or failing internal operations,

communities, and systems, or as an end of foreign circumstances, such as legal risk
and Shariah compliance risk.
    Internal fraud and mistakes made during negotiations are parts of losses
generated by human failure. As an illustration, in BIMB suppose a teller accidentally
hands a customer an extra RM 50 bill.

   On a broader scale, fraud can occur when a bank's cybersecurity is neglected. It

enables hackers to take customer information and money from banks and blackmail
them for more money. Banks lose capital as well as customer trust in such a
situation. The bank's reputation may suffer as a following, doing it more burdensome
to bring deposits or business in the future. Furthermore, most BIMB branches are
small and have limited space, which forms it challenging for many customers to
compromise with the bank and forces them to queue and wait longer. There aren't a
lot of ATMs around.

    BIMB manages operational risk by controlling and actively dealing with it in

conformity with the Bank's operational risk management and the approved Risk
Appetite. To increase and provide effective control of work risks in the bank, risk
units are inserted within significant tasks and risk managers in each segment. All
operational risk events and releases are described to Management and Board
Committees, along with a specific root cause inquiry and response project.

4.4 Liquidity Risk

     The ability of a bank to access cash to find financing needs is referred to as
liquidity risk. Allowing customers to withdraw their deposits is one of the necessities.
If a bank delays providing cash to some of its customers for a day, new depositors
may fly to withdraw their finances as they lose confidence in the bank. This reduces
banks' strength to keep funds even better. Over-dependence on short-called funding
sources, balance sheets focused on illiquid assets, and customer cost of confidence
in banks are all reasons why banks face liquidity problems. Mismanagement of asset
liability periods can also result in financing issues. This happens when a bank has a
lot of short-term liabilities, but not enough short-term assets.

BIMB keep a comprehensive liquidity risk strategy and limits in place, as well as
actively moving, checking, and maintaining liquidity risk within the approved Risk
Appetite. Proactive evaluation of all liquidity risk parameters in small of the overall
commercial situation. As a liquidify risk buffer, keep high-quality liquid assets and
well-diversified sources of funds on hand under both business-as-usual and stress
conditions. All risks and noncompliance are presented to Management and Board
Committees.
5.0 FORESIGHT OF BANK ISLAM MALAYSIA BERHAD (BIMB)

Bank Islam Malaysia Berhad (BIMB), the pioneer of Shariah-compliant banks, has
made history by becoming the first fully Islamic banking institution to be listed on the
Main Market of Bursa Malaysia. It comes after the final restructuring of BIMB
Holdings Bhd (BHB), when BHB's wholly-owned subsidiary, Bank Islam, took over
BHB's Main Market listing status. BIMB, which is expected to have a market
capitalization of RM6.3 billion, is now embarking on a five-year business plan
strategy known as LEAP25, which promises to adopt technology, re-plan growth,
and operate within new norms in order to address the challenges posed by the
COVID-19 pandemic.

Customers, investors, and other financial institutions will have more trust in Bank
Islam as a result of this listing. It also enables banks to invest in product and service
innovation in order to advance and provide the best benefits to customers. The move
will also allow banks to support their own business, such as financing, in addition to
focusing on new areas, such as complete financial solutions, Shariah-ESG, and
opening up opportunities for investors to participate in bank shares.

In addition, it emphasises the importance of digitization in providing the best possible

experience to its customers in the future. First, the digitization agenda will be
accelerated in two categories: internal and channel to customers. The second is
Bank Islam's DNA, which is an Environmental, Social, and Governance (ESG)
consideration that upholds syariah maqasid principles.

Furthermore, the halal industry by being the bank of choice for halal by customers,
as well as financing facilities to marginalised communities through Islamic social
financial instruments, as well as supporting efforts to regenerate the economies of
customers and post-COVID-19 countries. Banks will use alms, zakat, and waqf to
assist the vulnerable, who have little or no access to vital banking services.