Malaysia must ensure that its haj fund is sustainable for the long term with reforms to support responsible investments and “refreshing” the governing law, according to Abdul Rashid Hussain, chairman of Lembaga Tabung Haji (TH), the fund’s board.
He said there is an “urgent need to realign the fund’s operational model” by strengthening its depositor base, improving cost of managing funds, and implementing regulatory reforms.
“You cannot responsibly invest long-term if your depositors can withdraw their funds tomorrow,” Abdul Rashid said at a press conference on August 29.
He called for the Tabung Haji Act that governs the fund to be “refreshed” to introduce withdrawal notice periods for certain deposit accounts to enhance liquidity management.
Muslims save money with the fund to finance their pilgrimage to Mecca. They have to maintain at least 1,300 ringgit (US$307) in their accounts to keep their haj registration active.
They are currently allowed to withdraw their savings at any time, capped at 10,000 ringgit a day.
TH has 9.6 million depositors and manages 95 billion ringgit of assets.
