Bigger funds, bigger questions

AS a Muslim, I am obliged to perform the haj at least once in my lifetime. As a Malaysian, this means saving enough to undertake the pilgrimage through the fully government-owned Islamic financial institution, Lembaga Tabung Haji (TH).

Previously, the requirement to enter the haj queue was a minimum deposit of RM1,300.

My allocated turn is, I think, in 2078 – by which time I will most likely be long gone.

As such, my only options are to submit an appeal or opt for a VIP haj package once I can afford it.

Recently, I found myself venting my frustrations, along with members of my former schoolmates’ WhatsApp group, over TH’s latest move to impose a new minimum savings requirement.

The introduction of a RM15,000 minimum to retain one’s place in the haj queue marks a fundamental shift in how Malaysians prepare financially for the pilgrimage.

For those already registered, a transition period has been granted until Dec 31, 2028, to gradually increase our savings and retain our queue positions based on our original registration date and time.

According to TH, over 80% of the 4.1 million depositors registered for haj have savings of less than RM15,000, while 53% of TH’s 9.8 million account holders maintain balances below RM1,300.

While the policy is framed as a move towards greater discipline and readiness, it raises deeper questions about the role of TH as a steward of depositor funds – and whether sufficient safeguards are in place to prevent a repeat of past missteps.

Under the previous system, depositors only needed to top up their savings once selected for haj. This approach, while imperfect, had a certain financial logic.

Funds were mobilised closer to the actual pilgrimage date, limiting how long large balances sat within TH’s system.

I know people who withdrew up to RM10,000 from their Employee Provident Fund (EPF) accounts upon receiving their offer letters to top up their TH savings, in order to maximise their EPF returns. TH’s returns have moderated in recent years.

In effect, the pilgrims’ fund board was managing a smaller pool of committed funds at any given time, reducing the risks associated with long-term capital deployment.

The new framework changes that dynamic entirely. By requiring all depositors to accumulate RM15,000 well in advance, TH will likely see a significant expansion in its deposit base.

Even a conservative scenario highlights the scale: if just one million depositors who have yet to meet the threshold do so, TH would hold about RM15bil in deposits, a figure that could rise substantially over time.

As at August 2026, TH’s deposits stood at about RM88bil and are expected to reach RM100bil within two years.

This raises a critical question – not of intent, but of capability.

Can TH manage such a large and growing pool of funds with the prudence, transparency and discipline required?

Greater transparency required

The concern is not hypothetical.

TH has, in the past, faced well-documented issues related to asset quality, valuation practices and financial management, culminating in a major restructuring exercise.

That episode was a stark reminder that scale, in the absence of strong governance, can magnify risks rather than mitigate them.

To be fair, TH today is not the same institution it was before its restructuring.

Governance frameworks have been strengthened, asset transfers have cleaned up the balance sheet, and oversight has improved.

But the expansion of deposits under the new requirement introduces a fresh layer of complexity.

Larger funds require more sophisticated investment strategies, tighter risk controls and, crucially, greater transparency.

The risk lies in the potential mismatch between the nature of the funds and the investments undertaken.

Haj savings are, by definition, long-term but purpose-specific.

Depositors are not seeking aggressive returns; they are entrusting their money to an institution that is expected to preserve capital while generating stable, halal returns.

Any deviation from this mandate – whether through overly ambitious investments or poor asset selection – could undermine confidence.

Moreover, the longer funds remain within TH, the greater the pressure to deploy them productively.

Idle cash is not an option, but neither is indiscriminate investment. Striking this balance is easier said than done.

Another dimension worth considering is accountability.

With a potentially larger deposit base, TH’s responsibility to its depositors becomes even more pronounced.

What mechanisms are in place to ensure that investment decisions are subject to rigorous scrutiny? How transparent will TH be in communicating the performance and risks of its portfolio?

And how will stakeholders be assured that past issues will not resurface in a different form?

These questions are not meant to cast doubt on the policy itself.

There are valid reasons for encouraging earlier financial preparation among would-be pilgrims.

The concept of istito’ah, or financial capability, is central to the obligation of performing the haj.

Ensuring that pilgrims are financially ready can reduce last-minute withdrawals, improve operational planning and make better use of Malaysia’s haj quota.

However, policy effectiveness cannot be judged solely on administrative efficiency.

It must also be assessed in the context of institutional capacity and public trust.

Expanding deposits without a commensurate strengthening of governance risks creating vulnerabilities that may only become apparent over time.

Institutional responsibility

There is also a broader systemic implication.

TH occupies a unique position at the intersection of faith, finance and public policy.

It is not merely a savings institution; it is a custodian of funds entrusted by millions of Malaysians for a deeply personal and religious purpose.

Any perception of mismanagement, even if unfounded, can have far-reaching consequences for confidence in the institution.

Ultimately, the RM15,000 requirement shifts the conversation from individual readiness to institutional responsibility.

It is no longer just about whether depositors can afford the haj, but whether TH can manage their collective savings in a way that is consistent, transparent and aligned with its mandate.

If the new policy is to succeed, it must be accompanied by clear and credible assurances.

This includes stronger disclosure practices, robust risk management frameworks and a demonstrable commitment to prudent capital allocation.

TH must uphold its primary role as a trusted institution guiding Malaysians on their haj savings journey – a responsibility reflected in its logo, inspired by the Talbiyah chant, “Labbaik Allahumma Labbaik” (“Here I am at Your service, O Allah”).

As stated on its website, the logo embodies a single promise: that TH stands ready to answer the call of haj alongside its depositors – from the very first ringgit saved to the journey to the Holy Land.

Depositors are not merely participants in a queue; they are stakeholders – ordinary people, many of whom are scrimping and saving every penny to deposit with TH. Their trust must be earned and maintained.

The lesson from the past is clear: financial discipline must apply not only to depositors, but also to the institution that manages their funds.

Without that, even well-intentioned policies risk reopening old questions – and old wounds.