In Major Policy Shift, Hajj Money Is Now Being Invested in Islamic Banking

In the Islamic Republic of Pakistan, Government deposited billions of rupees of pilgrimage in the interest-based conventional banks for decades, but this year it has opted to use Islamic Banks to reserve the public money.

There are seven banks being used to invest and deposit money of Hajjis including Meezan Bank, Habib Bank Limited, Allied Bank Limited, United Bank Limited, National Bank Limited, Bank of Punjab, MCB and Bank Alfalah Limited.

Ministry of Hajj and Religious Affairs collects billion of rupees every year from Hajj pilgrimages in Pakistan for a period of two to three months through which it earns daily profit from banks.

For instance, 280,617 applicants applied for Hajj this year so far and the upfront fee is set at Rs 261,941 per pilgrimage, which translates into Rs. 73.53 billion of reserve for 2-3 months.

This money, unlike previous years, is now invested with Islamic Banks.

According to the reports, 143,368 lucky Pakistanis were shortlisted for Hajj this year, whereas remaining 137,249 applicants will be receiving money back from the Ministry.

Official sources said that the government spends money on Hajj operations on daily basis, hence it needs additional money which it generates through banks profit.

Besides, there was a fund of Rs 2 billion on the account of Pilgrimage Welfare Fund, which was also being maintained by Ministry in a conventional bank to multiply money regardless of Riba or interest issue, our sources added.

Reportedly there were efforts made in past to change the policy of the Ministry for keeping money in interest based banks, but it failed as the decision for changing banks is in the hands of Ministry of Finance.

The government of PML-N though has taken a good step to hire Islamic Banks for the services of Hajj operations.

Although there are apprehensions in the mind of public regarding operations of Islamic Banks, these banks are gaining acceptability among the public due to the support of renowned Ulema and Sharia scholars of different schools of thoughts.

Islamic Banking is growing in Pakistan at significant pace due to awareness campaign of banks and support of State Bank of Pakistan (SBP).

  • Banking system is not good irrespective of islamic or conventional bank! but we cant do anything, banks should not be involved in pillars like hajj!!!

    • How then should financial system work? Should we go to the so called dark ages and do 100% cash transactions only? No chance for budding new businesses to grow? Existing businesses to expand? Infrastructure projects to be suspended until government has enough funds through taxes?

      • Lolz pehle KMQ ke name se comment kia then ek alag name se usi par additional comment kar dia. Bhai yahan par sare log techie hain. So they know what is legit and whats not :p

  • Beware!! Someone is using KMQ as its name and adding comments. My comments would always be with my profile. Which you can check after clicking on KMQ.

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