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Philosophy and Fundamentals of Sharī’ah for Islamic Finance
SHA0011

Phase 1 Establishment of Islamic Financial Institutions

Tabung Haji
The experience of Islamic bank in Malaysia can be traced
from the birth of the world’s first Pilgrimage Management
and Fund Board or better known as Tabung Haji, which
was established under Act 8 of Pilgrimage Management
and Fund Board 1969 and Act A 168 of Pilgrimage
Management and Fund Board (Amendment) 1973.

The objectives of this entity, among others are:

• To enable Muslims to save gradually to support
their expenditure during pilgrimage and for
other beneficial purposes.

• To enable Muslims to have active and effective
participations in investment activities which are
permissible in Islam through their savings.

• To protect the interests and welfare of pilgrims
during pilgrimage by providing various facilities
and services.

Tabung Haji’s commitment and dedication in materialising
the above objectives are evident, not only by efficiently
and effectively managing pilgrimage matters but
also by becoming an alternative entity in managing
the investments of Muslims, in accordance to Islamic
teachings, besides giving competitive returns to the
depositors.

In order to further strengthen its competitiveness
domestically and internationally by way of diversifying
its scope and functions, a new act, the Pilgrimage
Board Act 1995 or better known as Akta Tabung Haji
1995 (Act 535) was enacted on June 1, 1995. This new
Act has automatically abolished the previous act and
consequently, the name Pilgrimage Management and
Fund Board has been changed to Pilgrimage Board
(better known as Lembaga Tabung Haji) effective
from August 28, 1997.

A more corporate-looking abbreviation, TH, was introduced
to the Malaysian and international public to replace
the words Tabung Haji. Most of the funds mobilised
by the Board are invested in corporate securities including
subsidiary shares, real estate companies, trust funds,
and short-term investment such as government
investment certificate. For the first time in 1990, the
Board had invested in Islamic bond based on Bay’
Bithaman Ājil and Mushārakah concept.