‘BNM MOVE IS TO EMPOWER TH’
Putting haj fund under Bank Negara creates aspect of checks and balances, says Zafrul
TABUNG Haji’s (TH) placement under Bank Negara’s Malaysia (BNM) purview is not only meant to strengthen its financial position, but also to protect its 8.3 million contributors.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul
Aziz said the placement of TH under BNM’s monitoring and regulation is an important component to empower the statutory body as an Islamic institution that is resilient within the nation’s financial ecosystem.
This, he said, would also raise TH’s position as a governmentlinked investment company.
He described TH as a financial institution that was systemic and interconnected to the country’s financial system due to its majorscale operation in terms of deposits and investments.
“As of the second quarter of this year, TH manages almost RM82 billion in deposits which accounts for 10 per cent of the total deposits in the Islamic banking system.
“Since a portion of the deposits received are placed in the Islamic banking institution, abrupt withdrawal of the deposits will have the possibility of triggering liquidity problems.
“With RM36 billion worth of corporate sukuk and as the largest shareholder in Bank Islam Malaysia Bhd, TH has major stocks in the form of strategic investments in various companies, including those listed in Bursa Malaysia,” he said yesterday.
On the move to enhance TH’s sustainability in the long term, Tengku Zafrul said the proposal to place the haj fund under the purview of BNM with a formal structure would also position the board as a prescribed Islamic financial institution under Section 233 of the Islamic Financial Services Act 2013.
The efforts undertaken to revamp TH, Tengku Zafrul said, would focus on the withdrawal of its deposits as well as strengthening its risk management, corporate administration and transparency.
He added that as per the powers provided under the Bank Negara Malaysia Act 2009, as well as the Islamic Financial Services Act 2013, the move to place TH under the central bank was subject to the provisions as stipulated by the two legislation.
The same approach, he said, was adopted in the control and regulation of development financial institutions, which were established with specific mandates, such as Bank Simpanan Nasional and Bank Kerjasama Rakyat Malaysia Bhd.
“Therefore, the proposed regulatory framework by Bank Negara over TH will adjust the business module’s risks and characteristics namely fit-for-purpose regulation” and a requirement as with other banking institutions.
So, the move to place TH under the purview of BNM was necessary to create a check-and-balance aspect, which was in line with the requirement of the Special Cabinet Committee on AntiCorruption.