BOARD OF DIRECTORS CHARTER 1.0 STATEMENT OF POLICY

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1 BOARD OF DIRECTORS CHARTER 1.0 STATEMENT OF POLICY The prime stewardship responsibility of the Board of Directors is to ensure the viability of the Bank and to ensure that it is managed in the best interests of the shareholder and the general public. As custodian of public funds, the Bank must exhibit integrity and professionalism in its conduct to engender public confidence in the safety of their deposits. 2.0 COMPOSITION 2.1 Selection of Members The board maintains an overview of the experience expected of the new directors. The Nominating Committee identifies candidates for appointment as board member. The appointments shall be subject to the approval of Bank Negara Malaysia. The Nominations and Compensation Committee will periodically evaluate the performance of the directors for re-appointment to or retirement from the board. The assessment will include, but not be limited to, contribution, commitment, dedication and continued relevance of experience and skills. 2.2 Membership Criteria Board members must have an appropriate mix of skills, knowledge and experience in business and an understanding of the regions in which the Bank operates. To ensure the effectiveness of the board, members should be from diverse backgrounds, with knowledge and experience in different pertinent disciplines which may include finance, accounting, legal, business management, information technology and investment management. 2.3 Board Size There must be at least five directors at any point in time. 2.4 Independent Directors The Board must have a majority of independent directors. The determination of independence status shall be determined by the Nominations and Compensation Committee / the Board and guided by the relevant legislations and regulations. 2.5 Chairman The roles of the Chairman and CEO shall be vested with two different individuals to ensure proper separation of governance from management. 1

2 2.6 Term of Directors The term of the office is for a period of three years or such other period as may be determined by BNM from time to time. The directors are elected by the shareholder at the Annual General Meeting and the Company s Constitution provide for the retirement of directors by rotation. All appointment and re-appointment of directors must be approved by Bank Negara Malaysia. 3.0 BOARD COMMITTEES 3.1 Audit Committee The Audit Committee reviews the financial condition, internal controls, performance and findings of the internal and external auditors, and to recommend appropriate remedial action. The Committee is to be guided by its Terms of Reference. 3.2 Risk Management Committee The Risk Management Committee assists the Board in fulfilling its oversight responsibility relating to activities in managing credit, market, liquidity, operational, legal and other franchise risk and to ensure the existence and functioning of robust risk management processes. The Committee is to be guided by its Terms of Reference. 3.3 Nominations and Compensation Committee The Nominations and Compensation Committee identifies individuals qualified to become board members. It leads the board in its annual review of the board s performance and recommends to the board candidates for each committee for appointment. The Committee is to be guided by its Terms of Reference. 4.0 QUORUM AND MEETING PROCEDURES 4.1 Quorum Simple majority of the directors shall be a quorum. 4.2 Meetings The board may meet at any time but no less than six times a year. Directors must attend at least 75% of the meetings held in each financial year. At all meetings, the Chairman, if present, shall preside. If the Chairman is absent, the members present at the meeting shall elect a chairman of the meeting. The Secretary (including any assistant secretary) of the Bank shall be in attendance and a record of proceedings shall be kept. 2

3 4.3 Documents The Bank will provide information on the business, finances and risks of the Bank to the directors on a regular basis as well as on an as required basis. 5.0 DUTIES AND RESPONSIBILITIES 5.1 Major responsibilities The board is responsible for the overall management of the Bank and shall ensure the Bank operates and conducts business on a trustworthy and transparent manner. The major responsibilities of the board are as follows:- Ensure compliance with local laws and regulations. Review performance vis-à-vis the requirements of BNM Corporate Governance policy. Review and approve the selection and appointment of Chief Executive Officer, control function heads and other members of senior management and oversee their performance, remuneration and succession plans. Ensure Bank is soundly managed. Delegate authority to senior executives to ensure sound management of the Bank s operations. Senior executives is responsible in ensuring the board is fully informed of all significant and material policies, changes in regulatory and management requirements, or problems or issues which require direct supervision and guidance. Review and approve strategies, risk appetite, business plans and significant policies and monitor management s performance. Delegate the authority to senior executives to provide objectives, business strategy and directions and management policies within which the management teams are to operate and as well to establish the necessary lines and limits of authority for all levels of staff so long as they are within the policies of Citigroup. Ensure the setting up of an effective internal audit department, staffed with qualified internal audit personnel to perform internal audit functions, covering the financial and management audit. Avoid self-serving practices and conflicts of interest including dealings of any form with related entities. Ensure the effective functioning of Audit Committee, Risk Management Committee and Nominating Committee. Ensure the Bank has a beneficial influence on the economic well-being of its community. The executive director has a continuing responsibility to the community to provide those banking services and facilities which will be conducive to a well-balanced economic growth. It is the duty of the executive director to ensure compliance with guidelines on 3

4 lending to priority sectors, which aim at providing the priority sectors of the economy with ready access to credit at reasonable cost. The credit approving function should be performed by full-time executive personnel or a committee comprising of such. Although not involved in the approval process, the Board has the veto power to reject credits or modify the terms of credits which have been approved by the banking institution s executive body/credit personnel should the majority of the Board be of the opinion that the loan would expose the banking institution to undue excessive risk. 5.2 Duties of Directors Be aware of the Bank s operating environment and promote safety and soundness of the Bank Be diligent in undertaking his duties and uphold the highest standards of integrity and avoiding positions of conflict of interest between the Bank and themselves, their relatives and corporation related to them Comply with the disclosure requirements in respect of their other business interests in accordance with the Companies Act and Financial Services Act 2013 (FSA). Be able to exercise independent judgement in decision making and provide sound and objective advice Understand his oversight role and duty of loyalty to the Bank, its shareholders and other stakeholders Objectively question management Devote adequate time and attention to discharge his duties and responsibilities effectively Contribute actively to the functions of the board and be able to provide special expertise to the board Abstain from any decisions which could place or potentially place them in situations of conflict and reporting to the board at the first instance of any potential conflicts of interest Expected to:- - attend all board and relevant committee meetings - study information and packages provided by management in advance of meetings and be prepared to discuss the contents at the meetings - read all reports and proposals submitted and if in order approve them promptly 6.0 RIGHTS OF DIRECTORS Every director has the right to resources, whenever necessary and reasonable for the performance of his duties, including but not limited to:- 4

5 obtaining full and unrestricted access to any information pertaining to the activities of the Bank. obtaining full and unrestricted access to the advice and services of the bank s external auditors and/or Company Secretary obtaining independent professional or other advice 7.0 DISQUALIFICATIONS OF DIRECTORS A person is disqualified from holding the position as a director of the Bank should any of the following occurs:- If he becomes of unsound mind If he is a bankrupt, has suspended payments, or has compounded with his creditors, whether within or outside Malaysia If an offence under FSA or a charge for criminal offence under any written law has been proved against him in any court within or outside Malaysia If there has been made any order of detention, supervision, restricted residence, banishment or deportation under any law If he has been a director of or directly concerned in the management of a corporation wound up by the court or of a banking institution whose license has been revoked Notwithstanding the above, a director can be disqualified from holding the position for any other reasons as outlined under FSA. If a receiving order is made against him or he makes any arrangement or composition with his creditors If he absents himself from Meetings of Directors for period of 6 month without special leave of absence from the other Directors, and they pass a resolution that he has by reason of such absence vacated his office If he is removed by a resolution of the Company in General Meeting of which special notice has been given If he is prohibited from being a Director by any order made under any provision of the Companies Act,