PAUHS Raises Concerns Over RM250,000 Bank Guarantee Requirement

PAUHS president Nor Azmi Abi Shafian.

4 January 2026

KOTA KINABALU: The Sabah Umrah and Hajj Agencies Association (PAUHS) has expressed serious concern over the implementation of a RM250,000 bank guarantee as a prerequisite for the renewal of umrah agency licences.

“We respect the government’s intention to strengthen industry governance, enhance integrity, and ensure comprehensive protection for pilgrims.

“We fully support firm action against any agency involved in fraud, breach of trust, or failure to fulfil obligations to customers.

“Licence suspension, heavy penalties and blacklisting must be enforced without compromise to ensure that only credible operators remain in the industry,” said PAUHS president Nor Azmi Abi Shafian.

His comments followed an announcement by the Ministry of Tourism, Arts and Culture (Motac) that the new requirement will take effect on 15 May 2026 and will apply to umrah and outbound travel agencies.

However, Azmi said the blanket implementation of a high bank guarantee requirement raises serious concerns regarding balance and the long-term sustainability of the umrah industry ecosystem, particularly in Sabah and Sarawak.

“This approach risks creating an industry increasingly dominated by large, well-capitalised players, while limiting opportunities for small and medium-sized operators who have long operated ethically and played an important role in widening public access to umrah.

“If not reviewed promptly, this policy may result in a less competitive industry landscape, where capital strength becomes the primary determinant of survival rather than integrity or service quality.

“Such an outcome could weaken market dynamics and erode the entrepreneurial spirit among local operators,” he said.

Azmi further emphasised that industry observations indicate reported cases of umrah fraud more frequently involve agencies based in Peninsular Malaysia, while cases involving operators from Sabah and Sarawak remain rare.

As such, he said a blanket policy that fails to account for differing risk patterns may create perceptions of unfairness and impose a disproportionate burden on Borneo-based operators.

“Effective regulation should be strategic and targeted, focusing on high-risk parties rather than producing broad effects that also pressure agencies with strong track records,” he said.

In this regard, Azmi noted that existing regulatory approaches should be refined to ensure consumer protection objectives are achieved without undermining the viability of compliant operators.

Accordingly, PAUHS is of the view that the requirement should be comprehensively reviewed and implemented through a more balanced approach to avoid unintended long-term impacts on the industry’s structure.

“A robust policy must not only be firm, but also fair, practical and reflective of operational realities on the ground,” he added.

To achieve this balance, PAUHS urged the authorities to consider:

Recognition of alternative protection mechanisms, such as insurance schemes, which can safeguard pilgrims without placing excessive financial strain on smaller operators.

More comprehensive and structured industry engagement prior to finalising any policy, to ensure implementation reflects actual industry needs.

Data- and risk-based enforcement approaches that target problematic agencies, ensuring operators with integrity are not unduly burdened.

PAUHS believes the government does not intend to disadvantage industry players, but rather seeks to strengthen the national umrah ecosystem.

Nevertheless, Azmi stressed that when introducing large-scale policies, it is essential to ensure they do not inadvertently restrict industry participation or hinder the growth of local operators.

“The umrah industry is not merely an economic sector; it is a trust involving the management of Muslims’ pilgrimage journeys,” he said.

Every policy decision, he added, must reinforce confidence, preserve industry stability and ensure opportunities remain open to competitive and ethical operators.

PAUHS remains committed to working constructively with the government to strengthen the umrah industry so that it remains sustainable, inclusive and trustworthy.

“We are confident that a careful review at this stage will help shape a stronger, more resilient and fairer industry ecosystem for all stakeholders,” he said.

The future of the industry, he added, should not be determined by capital capacity alone, but by integrity, accountability and trust.

He expressed hope that due consideration would be given in the best interests of pilgrims, the industry and the nation.