Prof Dr Ashraf Md Hashim
MELAKA, Dec 14 -- The new Wakalah concept savings contract, to be implemented by Tabung Haji (TH) at the end of this month, will allow depositors to help other Muslims to perform hajj, said TH Shariah Advisory Council chairman Prof Dr Ashraf Md Hashim.
He said through the Wakalah contract, a small amount from the depositors’ profits would be used to fund hajj cost.
"In Wakalah, Tabung Haji will act as 'wakil' or agent on behalf of the depositors and is responsible to pay the profits, if there are any, after subtracting management cost, hajj cost and tithe. The remaining will be given in full to depositors," he told Bernama here.
On Tuesday, TH announced the transition to the Wakalah concept savings contract, to replace the Wadiah Yad Dhamanah contract used previously.
The new Wakalah concept, effective Dec 31, 2019, will provide added value and benefits to depositors without affecting any of the existing facilities and benefits of account holders, including government's guarantee on the savings.
Ashraf further explained that under the Wadiah Yad Dhamanah, deposits given to TH are in the form of credit while under the Wakalah concept, it is in the form of capital.
Under Wadiah Yad Dhamanah, the profits were given based on discretion, and it could become usury if the contract dictated that the profits were compulsory, he added.
He also said that under the new concept, TH could carry out promotional activities such as giving prizes to depositors which was considered usury before.
In terms of operations, the ISRA Consultancy chief executive said with the capital-based concept, TH would become more disciplined and transparent in its management.
Ashraf also hopes that the implementation of Wakalah would attract more depositors for TH.