Advice To Tabung Haji Part Of BNM’s Financial Stability Mandate

By Karina Imran & Danni Haizal Danial Donald

KUALA LUMPUR, Aug 15 (Bernama) -- Bank Negara Malaysia (BNM) emphasised that the advice it provided to the Lembaga Tabung Haji (TH) was part of its financial stability mandate under the Central Bank of Malaysia Act 2009. 

In a response to Bernama, the central bank said its role in relation to TH stemmed from its mandate to monitor and identify risks to overall financial stability.

This includes monitoring major non-bank financial institutions that have significant interconnections with the financial system.

“The implementation of this mandate is supported by the establishment of the Financial Stability Executive Committee (FSEC) under the Central Bank of Malaysia Act 2009.

“Based on its surveillance, BNM and FSEC may, from time to time, provide advice to significant non-bank financial institutions,” the central bank said in response to the ongoing Royal Commission of Inquiry (RCI) into the pilgrimage fund.

BNM stressed that although TH is not an institution under its direct supervision, advice may be provided to TH’s Board of Directors and the Minister responsible for the entity as a precautionary measure to ensure the institution’s financial position remains sound and to mitigate any potential systemic implications for the nation’s financial system. 

Previously, the central bank had issued five warning letters to the TH chairman and the Minister of Religious Affairs regarding the gap between TH's assets and liabilities.

BNM’s warnings were followed by a reprimand from the Auditor-General in the 2017 Financial Statements Report.

The government announced the establishment of the RCI in 2021, followed by the appointment of its members on Jan 20, 2022. The report was subsequently presented to the Yang di-Pertuan Agong on Aug 30, 2022.

 -- BERNAMA