MoF: Tabung Haji to undergo an operational overhaul, to become a prescribed financial institution under the control of the BNM

KUALA LUMPUR (July 15): Cabinet has agreed to undertake an overhaul of Lembaga Tabung Haji (Tabung Haji) to improve its operations and management, the Ministry of Finance (MoF) announced today.

This will include a new operating model for the pilgrim fund, which will be jointly reviewed by the prime minister’s department, the finance ministry, Bank Negara Malaysia (BNM) and Tabung Haji, the ministry said in a statement.

Putrajaya also plans to put the institution on the list of Islamic financial institutions prescribed under the BNM under Article 223 of the Islamic Financial Services Law of 2013 and will revise the Tabung Haji Law of 1995 for this. .

“The aspect of governance, integrity and reputation of Tabung Haji as an Islamic financial savings institution is crucial to improve the stability of the financial situation of Tabung Haji, to secure and protect the rights of Malaysian depositors and hajj pilgrims.

“As stated in the Tabung Haji Law of 1995, depositors’ savings remain safe and secure by the government,” the statement said.

The decisions were taken during the Council of Ministers meeting on Wednesday 14 July.

On Wednesday evening, Deputy Prime Minister Datuk Seri Ismail Sabri Yaakob announced that the government would set up a Royal Commission of Inquiry (RCI) under the 1950 Commission of Inquiry Act (Bill 119) to investigate Tabung Haji’s problems.

The finance ministry said today that the RCI will review the findings of the Tabung Haji audit by the consultants from 2014 to 2018, as well as the recovery actions taken by the pilgrims fund until 2020, on the basis of the consultants’ conclusions.

“However, as decided by Cabinet on July 14, 2021, the scope of this commission will not include the continued overhaul and restructuring efforts that are being undertaken to improve governance in Tabung Haji,” the ministry said.

Tabung Haji has been the subject of restructuring efforts since 2018, after the administration of Pakatan Harapan discovered that the fund had more liabilities than assets amid high exposure to the equity market and several deals. salespeople gone bad.

Between 2014 and 2017, Tabung Haji’s assets grew by an average of 8.7% per year to reach 70.4 billion ringgit from 54.7 billion ringgit. According to the consultants’ findings in 2018, however, its net assets fell to Ringgit 64.6 billion – below its total liabilities of Ringgit 75.5 million at the time – resulting in the restructuring to allow to the fund to continue paying its hibah to depositors.

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