Every year our commercial banks hold billions of rupees of the Haj applicants for many weeks. Banking sector experts believe that the banks collect more than 25 billion rupees from the Haj applicants every year.
This amount is collected from the applicants about 45 days ahead of Haj balloting by the government and then disbursed to the government against the allocated number of Haj quota and the amount of unsuccessful applicants is reimbursed in two to four weeks after balloting. Top banks like National Bank of Pakistan, MCB Bank, Habib Bank, United Bank, Allied Bank, Standard Chartered Bank of Pakistan and Bank Alfalah collect the lion’s share of money from the Haj applicants.
Banking sector experts believe that the banks hold billions of rupees of the applicants for more or less two and a half months and take the financial advantages of this money during this period. Why the banks hold public money for many weeks without sharing an incentive with the depositors? What kind of the strategy the State Bank of Pakistan and the domestic banks should adopt to share incentives of gains from this big amount every year? These are the questions that need to be discussed.
Practically, there is no check and balance of deadline on the commercial banks to receive billions of rupees from the people who apply to perform Haj under government quota much ahead of the balloting and to return the money to the unsuccessful applicants. Some branches reimburse the money in few days and some delay it for weeks and create unnecessary hassle for the depositors.
Experts are of the opinion that the banks should collect only 20 to 25 percent of the total amount from the applicants before balloting and remaining money should be collected after balloting from those who are selected through balloting.
Second idea is that the banks must receive entire money from the Haj applicants in the Shariah-compliant accounts of the applicants and either pass on to the people the financial incentives gained from the money during 10 to 12 weeks or the banks should pool some percentage of the money to offer incentives, including free Haj and Umra to the people and their family members who deposit the money.
When the bank lend money to their customers, the banks charge mark up on daily basis, but in Haj applications cases the financial institutions collect billions of rupees, but do not give any incentives to the depositors – neither to those who are selected through balloting nor to those prove unlucky in the draw.
It is a common viewpoint that neither the banks would offer mark-up on the amount collected from the Haj applicants as it is ‘Haraam’ in Islam nor the depositors would like to get interest at call. Because the people deposit the money with their noble mission of performing Haj to seek blessings and mercy of Allah Almighty.
The banks, however, can share the incentives with the applicants by receiving amount in Shariah-based accounts and set aside a certain amount every year to give surprise to the Haj applicants by offering free Haj or Umra through lucky draw.
The domestic banks, however, would not like to do it on their own because of their lust of minting more and more profit and it is the government and the State Bank of Pakistan who can motivate the banks to share benefits of holding billions of rupees for many weeks with the people.
We hope that either the government or the State Bank of Pakistan would take this idea seriously and set a good precedent of providing incentives to the people and their family members who deposit money for Haj.