A simpler fix for Tabung Haji – Tuan Ariff

THE debate over Lembaga Tabung Haji tends to return to the same questions: Who made the
mistakes? Who should be accountable? and whether past restructurings were justified.

Perhaps we should ask a simpler question. What should Tabung Haji actually be doing?

Tabung Haji has two extraordinary assets: the trust of millions of Malaysian Muslims and one of
the world’s most established Hajj management platforms.

Its weakness is that we also expect it to behave like a sophisticated investment institution.
There may be a simpler solution.

Tabung Haji is already the largest shareholder of Bank Islam. Bank Islam has bankers, treasury
expertise, risk management, credit capabilities and a regulated financial infrastructure.

TH has something equally valuable: millions of depositors and a large, sticky, relatively low-cost
pool of savings. Bring the two much closer together.

The objective need not be an immediate legal merger. Start by integrating their economics and
financial infrastructure.

Let Tabung Haji concentrate on the Hajj, its depositors and customer service. Let Bank Islam become the banking and financial engine of the ecosystem. This has another advantage.

Bank Islam is fully Shariah-compliant. That is its identity and strength, but it can also make
product development more specialised and sometimes more expensive than at a conventional
universal bank.

The TH ecosystem gives Bank Islam scale, funding and customers that few competitors can
replicate. More importantly, Bank Islam is regulated by Bank Negara Malaysia.

That means banking activities sit within an established framework covering capital, liquidity, risk,
governance and Shariah oversight. Instead of TH having to reproduce these capabilities itself,
Malaysia can use a regulatory architecture that already exists.

Then there is the investment problem. Urusharta Jamaah was created to take over and rehabilitate assets transferred from TH following the 2018 restructuring.

That capability should not simply disappear.

Turn UJSB into the professional outsourced investment manager for the TH ecosystem.
The structure becomes simple.

TH: Hajj, depositors and service.

Bank Islam: banking, liquidity, financing and financial products, governed by BNM.

UJSB: professional investment management.

TH would still determine its investment objectives, risk appetite and strategic asset allocation.
But investment execution would sit with professionals whose performance can be measured
transparently. This is ultimately a question of institutional design.

Malaysia does not necessarily need another restructuring of Tabung Haji’s balance sheet.
It needs to decide what each institution is actually supposed to be good at.

We already have the three pieces. Put them together properly. – August 19, 2026

***Tuan Ariff is a Scoop reader and seasoned banker who has worked directly on transactions involving the Tabung Haji ecosystem, including the TH Plantations IPO and Urusharta Jamaah.