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Risk Monitoring Committee Guidelines and Work Rules

The Risk Monitoring Committee's Work Guidelines and Regulations were prepared as part of BCA Syariah's commitment to implementing good corporate governance

The Risk Monitoring Committee is a committee established by the Board of Commissioners to assist in monitoring and managing the risk profile at BCA Sharia by evaluating risk management policies, assessing the alignment between risk management policies and their implementation, and evaluating the performance of the Risk Management Committee and the Risk Management Work Unit. It provides recommendations to the Board of Commissioners.

Risk Monitoring Committee Charter

In carrying out its functions at the Bank, the Risk Monitoring Committee has a Committee Charter containing guidelines and working procedures based on the Board of Directors' Decree regarding Good Corporate Governance Policies. It covers the committee's duties and responsibilities, structure, description of activities and authorities, working hours, and meeting arrangements. The GCG Manual is compiled based on applicable regulations and laws and is periodically reviewed.

Here is a summary of the Guidelines and Working Procedures of the BCA Sharia Risk Monitoring Committee:

Structure and Composition of the Risk Monitoring Committee

The following is the structure and membership of the Risk Monitoring Committee:

  1. Risk Monitoring Committee members are accountable to the Board of Commissioners.
  2. The Risk Monitoring Committee membership consists of at least:
    • An Independent Commissioner who serves as the Chairman of the Risk Monitoring Committee.
    • One Independent Party with expertise in Sharia banking and one Independent Party with expertise in Risk Management.
  3. Risk Monitoring Committee members are not members of the BCA Sharia Board of Directors or other banks.
  4. The majority of Commissioner members who are Risk Monitoring Committee members must be Independent Commissioners.
  5. The appointment of Risk Monitoring Committee members is made by the Board of Directors based on the Board of Commissioners' Meeting Resolution.

Membership Requirements

Requirements to be fulfilled by Risk Monitoring Committee members include:

  1. Risk Monitoring Committee members from Independent Parties must come from outside BCAS, have no financial, managerial, share ownership, and/or family relationships with the Board of Commissioners, Board of Directors, and/or controlling shareholders or relationships with BCAS that could affect their ability to act independently.
  2. All Independent Parties from former BCAS Directors (if any) who do not perform supervisory functions that could affect their ability to act independently must have undergone a cooling-off period of at least 6 (six) months.
  3. Risk Monitoring Committee members must not be individuals within Public Accounting Firms, Law Consultancy Offices, or other parties providing audit services, non-audit services, and/or other consulting services to BCAS in the last 6 (six) months before being appointed by the Board of Commissioners.
  4. Do not have an affiliation with BCAS, members of the Board of Commissioners, members of the Board of Directors, or Major Shareholders of BCAS.
  5. Risk Monitoring Committee members must have good financial integrity and reputation, including:
    • Having good morals and ethics, high responsibility, and a strong commitment to accountability.
    • Commitment to comply with BCAS regulations and other applicable laws and regulations.
    • Having sufficient knowledge to read and understand BCAS risk profiles.
    • Not being listed in the bad credit list.
    • All Independent Party Committee members do not have financial, managerial, share ownership, and/or family relationships with Controlling Shareholders, members of the Board of Commissioners, and/or members of the Board of Directors or financial and/or share ownership relationships with the Bank that could affect their ability to act independently.

Independence

All Risk Monitoring Committee members are independent parties, meaning they have no financial, managerial, share ownership, and/or family relationships with members of the Board of Commissioners, members of the Board of Directors, and/or Controlling Shareholders or business relationships with the Bank that could affect their ability to act independently.

Concurrent Positions

  1. The Chairman of the Risk Monitoring Committee can only hold a maximum of 1 (one) position as Chairman in another Committee at BCA Sharia.
  2. Risk Monitoring Committee members from Independent Parties can concurrently hold positions as Independent Parties in other Committees at BCA Sharia and/or other banks, as long as they:
    • Meet all required competencies.
    • Meet independence criteria.
    • Can maintain bank confidentiality.
    • Adhere to applicable codes of ethics.
    • Do not neglect the performance of their duties and responsibilities as Risk Monitoring Committee members at BCA Sharia.

Tasks and Responsibilities

The tasks and responsibilities of the Risk Monitoring Committee include:

  1. Providing recommendations to the Board of Commissioners to improve the effectiveness of risk management tasks and responsibilities and ensuring that risk management policies have been implemented properly.
  2. As a sub-organ of the Board of Commissioners, the Risk Monitoring Committee performs:
    • Evaluation of Risk Management policies through discussions on the latest risk control methodologies and the certainty of financing from the Risk Analysis Work Unit and the latest operational banking risk issues from the Risk Management Department.
    • Monitoring and evaluating the performance of the Risk Management Committee and the Risk Management Department related to financing risk management; market risk; risk profile reports; the latest operational banking risk issues; integrated risk management implementation; and stress test results for market risk, credit risk, and liquidity risk.
  3. The Risk Monitoring Committee is obliged to prepare and/or update guidelines and working procedures for the Risk Monitoring Committee.
  4. Based on the monitoring and evaluation conducted, the Risk Monitoring Committee provides recommendations to the Board of Commissioners on the overall implementation and development of risk management.

Ethics and Working Hours

  • Work Ethics: Risk Monitoring Committee members must adhere to the BCA Sharia Code of Ethics.
  • Working Hours: The Risk Monitoring Committee must allocate sufficient time to carry out its tasks and responsibilities optimally.

Risk Monitoring Committee Meetings

Mechanism and Decision-Making of Meetings

The following are provisions regarding Risk Monitoring Committee Meetings:

  1. Risk Monitoring Committee Meetings are held as needed by BCA Sharia and at least 4 (four) times a year.
  2. Risk Monitoring Committee Meetings are valid if attended by at least 51% (fifty-one percent) of the total members and attended by the Chairman of the Risk Monitoring Committee and Independent Parties.
  3. Decisions of the Risk Monitoring Committee Meetings are made based on consensus.
  4. In the absence of consensus, decisions are made based on the majority vote.
  5. The Chairman of the Risk Monitoring Committee and each member have one voting right each.
  6. All Risk Monitoring Committee decisions are binding on all Risk Monitoring Committee members.

Meeting Minutes

The following are provisions regarding Risk Monitoring Committee Meeting Minutes:

  1. The results of Risk Monitoring Committee Meetings must be documented in Meeting Minutes signed by all attending Risk Monitoring Committee members and well-documented.
  2. Dissenting opinions that occur in Risk Monitoring Committee Meetings must be clearly stated in the Meeting Minutes, along with the reasons for the dissenting opinions.
  3. Copies of the Risk Monitoring Committee Meeting minutes signed by all attending Risk Monitoring Committee members must be distributed to all Risk Monitoring Committee members.
  4. All Risk Monitoring Committee decisions recorded in the Meeting Minutes are joint decisions of all Risk Monitoring Committee members.