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NOTES TO THE
FINANCIAL STATEMENTS

for the financial year ended 31 december 2020 (continUed)

49 FINANCIAL RISk MANAGEMENT POLICIES (CONTINUED)
49.5 Liquidity risk (continued)
(a) Banking (continued)
Savings account, current account, investment accounts (ia) and term deposits form a critical part of the bank’s
funding profile, and the bank places considerable importance on maintaining their stability. the stability depends
upon preserving depositor confidence in the bank and the bank’s capital strength and liquidity, and on competitive
inteGrated annUal rePort 2020 the bank’s liquidity management is primarily carried out in accordance with bank negara malaysia’s requirements
and transparent pricing.

and the internal limits are approved by the bank’s alco and/or brc. the limits vary to take account of the depth
and liquidity of the local market in which the bank operates. the bank maintains a strong liquidity position and
manages the liquidity profile of its assets, liabilities and commitments to ensure that cash flows are appropriately
balanced and all obligations are met when due.
the management of liquidity risk is principally carried out by using sets of policies and guidelines approved by the
bank’s alco and/or brc, guided by the board’s approved risk appetite Statement.
306 the bank’s alco is responsible under the authority delegated by the bank’s brc for managing liquidity risk at
strategic level.

Management of liquidity risk
bimb holdinGS berhad 199701008362 (423858-X) • Maintaining sufficient liquidity surplus and reserves to sustain a sudden liquidity shock;
all liquidity risk exposures are managed by the bank’s treasury, who has the necessary skills, tools, management
and governance to manage such risks. limits and other risk controls are set to meet the following objectives:

• Ensuring cash flows are relatively diversified across all maturities;
• Ensuring deposit base is diversified and not overly concentrated to a relatively small number of depositors;
• Maintaining sufficient borrowing capacity in the Interbank market;
• Maintain sufficient highly liquid financial assets;
• Not over-extending financing activities relative to the deposit base; and
• Not over-relying on non-Ringgit liabilities to fund Ringgit assets.
the bank’s mrmd is the independent risk control function and is responsible for ensuring efficient implementation
of liquidity risk management framework. it is also responsible for developing the bank’s liquidity risk management
guidelines, monitoring tools, behavioural assumptions and limit setting methodologies. escalation procedures are
documented and approved by the bank’s alco and/or brc, with proper authorities to ratify or approve the excess.
in addition, the liquidity risk exposures and limits are regularly reported to the bank’s alco and the brc.