RM-1.1 RM-1.1 Risk Management
RM-1.1.1
Islamic bank licensees must have in place a comprehensive risk management and reporting process, including appropriate board and senior management oversight to identify, measure, monitor, report and control the categories of risk relevant to their business, and where appropriate, to hold adequate capital against these risks. The risk management function must have an appropriate standing and authority within the bank and must be actively involved at an early stage in elaborating the bank's risk strategy and in all material risk management decisions.January 2013RM-1.1.2
The above process should take into account appropriate steps to comply with Shari'a rules and principles, to ensure the adequacy of relevant risk reporting to the CBB.
January 2013RM-1.1.3
The Board must approve the risk management objectives, strategies and policies that are consistent with the
Islamic bank licensee's financial condition, risk profile and risk tolerance. The risk management objectives, strategies, policies and procedures must be stated in a set of formal risk management documents. The risk management documents must be communicated at all levels within theIslamic bank licensee involved in the implementation of risk management policies (see Sections HC-1.2, HC-9.2, CM-2.1 and CM-4.7 for more detailed rules and guidance).Amended: January 2020
January 2013RM-1.1.4
Islamic bank licensees must implement sound processes of risk identification, measurement, mitigation, monitoring, reporting and control. This process requires the implementation of appropriate policies, limits, procedures and effective management information system (MIS) for internal risk reporting and decision-making that are commensurate with the scope, complexity and nature of theIslamic bank licensee's activities.January 2013RM-1.1.5
Islamic bank licensees must implement an adequate control framework with effective checks and balances in compliance with CBB Rulebook requirements identified in this and other Modules and with the requirements of the CBB Law.January 2013RM-1.1.6
The Board must ensure that risk reporting to the CBB is made within the required deadlines and of high quality. In addition, to formal reporting requirements, the Board and senior management must be prepared to provide additional information to the CBB and stakeholders of the
Islamic bank licensee to identify emerging problems, including those giving rise to systemic risk issues.January 2013RM-1.1.7
The
Islamic bank licensee must make appropriate and timely disclosure of information to investment account holders (IAHs) to enable assessment of risks and rewards of investments, using AAOIFI auditing standards (see Paragraphs PD-1.3.32 — PD-1.3.35 for detailed disclosure requirements).January 2013
