How did the announcement of a 1.25 per cent hibah affect Tabung Haji withdrawals?

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Tabung Haji Hibah Announcement Led to RM6 Billion Panic Withdrawal in 2019

The announcement of a 1.25 per cent hibah (dividend) for 2018 in early 2019 triggered a panic withdrawal from Tabung Haji, resulting in net withdrawals of RM6 billion within a short period. This event highlights the sensitivity of depositor confidence to dividend declarations and the potential financial strain such withdrawals can place on the institution. The preceding year, 2018, saw the government facing a significant hypothetical risk of assuming approximately RM74.5 billion in liabilities had a massive panic withdrawal occurred then.
Significant Net Withdrawals Followed Hibah Declaration

Following the declaration of the 1.25 per cent hibah for 2018, Tabung Haji experienced a substantial outflow of funds. This panic withdrawal amounted to RM6 billion in net withdrawals, occurring over a concentrated period. This figure underscores the immediate impact of dividend announcements on depositor behaviour and the institution's liquidity.
Potential RM74.5 Billion Liability in 2018

The risk of a massive panic withdrawal in 2018 was a serious concern, with the government potentially facing liabilities estimated at RM74.5 billion. This hypothetical scenario, had it materialised, would have placed immense financial pressure on public funds. The minister in charge of religious affairs noted that such an event could have been even more severe if no hibah had been declared that year.
Tabung Haji's Technical Insolvency and Restructuring

At the time of these events, Tabung Haji was technically insolvent, necessitating intervention to restore its financial health. The Pakatan Harapan government implemented a restructuring plan aimed at achieving solvency and ensuring long-term financial sustainability for the institution. This restructuring was a direct response to the precarious financial position identified.

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How did the announcement of a 1.25 per cent hibah affect Tabung Haji withdrawals?

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