Advertisement

Cash Waqf Deposit Product: An Innovative Instrument of Islamic Banks for Socio-Economic Development in Bangladesh

  • M. Mizanur Rahman
  • M. Nurul Islam Sohel
Chapter

Abstract

Cash waqf is a modern dimension of waqf which was developed during the lifetime of Prophet Mohammad (saw) although it has not been practiced that much. In Islam, land was the first waqf, which has been randomly used in different countries of the world, including Bangladesh. But, according to 1986 census of waqf estate, there are thousands of waqf estates in Bangladesh which are neglected and sloppily maintained, underdeveloped and are devoid of any dynamic futuristic developmental plan. Some of these valuable waqf properties, especially the lands, are being leased out with nominal charges or sold out for insignificant prices. The annual income of the waqf estates is Tk. 906 million while the expenditure Tk. 856 million. The net collection is Tk. 50 million only, which is very insignificant in respect of the potentiality of the estate. Besides, the challenges of the waqf institutions are numerous and of enormous magnitude, therefore, Social Islami Bank Limited (SIBL) in 1997 has developed cash waqf model. Presently, cash waqf is a well-established alternative method of waqf. Twelve commercial banks (six Islamic and six conventional banks) in Bangladesh have been practicing cash waqf, and the fund is channeled through educational, social, and cultural development of the country. This study aims to describe the Mudarabah Cash Waqf Deposit Product and Certificates and its contribution toward socio-economic development of Bangladesh. Both qualitative and quantitative data were collected from the secondary sources and also by interviewing the clients and beneficiaries by using semi-structured schedule. As a case study, the operational thrust of the banks is reviewed to provide real-life evidence of the process of floating a Cash waqf Bank Deposit Product and its Certificate. Study shows that this voluntary-sector savings and investment mobilization can help Islamic banking for economic development of the country. Study also reveals that the Cash waqf Bank Deposit and Certificate has been monetizing the Islamic voluntary sector and helps accumulate social capital and national wealth, socio-economic development, and poverty alleviation of the country. While the indirect tax system of the country is favorable to its growth, political will is needed for the success of this form of waqf.

References

  1. Abdullah Nadwi, M., & Kroessin, M. (2013). Cash Waqf: Exploring Concepts, Jurisprudential Boundaries and Applicability to Contemporary Islamic Microfinance.Google Scholar
  2. Adam, S., & Lahsasna, A. (2013). Cash Endowment as Source of Fund in Islamic Micro-Financing. In 4th International Conference on Business and Economic Research (4th ICBER 2013).Google Scholar
  3. Ahmad Zaki Hj Abd Latiff, Che Zuina Ismail, & Norzaidi Mohd Daud. (2006). Pengurusan Harta Wakaf Dan Potensinya Ke Arah Kemajuan Pendidikan Umat Islam di Malaysia (Kertas Kerja Konvensyen Wakaf 2006 di Hotel Legend, Kuala Lumpur, 12–14 September 2006).Google Scholar
  4. Allah, M. A., Kameel Mydin, A., & Yusuf, S. M. (2014). Factors Influencing the Behavioral Intentions of Muslim Employees to Contribute to Cash-Waqf Through Salary Deductions. Islamic Economics, 28(1), 57–90 (January 2015).Google Scholar
  5. Aziz, M. R. A., Johari, F., & Yusof, M. A. (2013). Cash Waqf models for financing in education. The 5th Islamic Economic System Conference (iECONS2013).Google Scholar
  6. Cizakca, M. (2004). Incorporated Cash Waqfs and Mudaraba, Islamic Non-Bank Financial Instruments from the Past to the Future.Google Scholar
  7. Cizakca, M. (2010). Incorporated Cash Waqfs and Mudaraba, Islamic Non-bank Financial Instruments from the Past to the Future (MPRA Paper). http://mpra.ub.unimuenchen.de/25336.
  8. Developments of Islamic Banking in Bangladesh (DIBB). (2017, April–June). Islamic Banking Cell, Research Department, Bangladesh Bank.Google Scholar
  9. Hoseini, M. K. (2010). Cash-Waqf: A New Financial Instrument for Financing Issues: An Analysis of Structure and Islamic Justification of Its Commercialization. Imam Sadiq University.Google Scholar
  10. Ibrahim, H., Amir, A., & Masron, T. A. (2013). Cash Waqf: An Innovative Instrument for Economic Development. International Review of Social Sciences and Humanities, 6(1), 1–7.Google Scholar
  11. Konsep Wakaf Tunai. (2016). Majlis Agama Islam Negeri Johor. Retreived April 26, 2016, from, http://www.maij.gov.my/?page_id=439.
  12. Magda Ismail, A. M. (2008, July 28–29). Cash Waqf a New Financial Product Model Aspects of Shariah Principles on ITS Commercialization. This Paper Is Presented at Islamic Banking, Accounting and Finance Conference (iBAF 2008), organized by Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, The Legend Hotel, Kuala Lumpur 2008.Google Scholar
  13. Mannan, M. A. (1998). Cash-waqf Certificate Global Opportunities for Developing the Social Capital Market in 21st-Century Voluntary-sector Banking. The Third Harvard University Forum on Islamic Finance: Local Challenges, Global Opportunities (pp. 243–256). Cambridge, MA: Center for Middle Eastern Studies, Harvard University.Google Scholar
  14. Mannan, M. A. (2014). Waqf Development: Bangladesh Experience Local Challenge and Global Opportunity (pp. 1–36). Kuala Lumpur: The International Waqf Seminar.Google Scholar
  15. Masyita, D., Tasrif, M., & Telaga, A. S. (2005, July 17–21). A Dynamic Model for Cash Waqf Management as One of the Alternative Instruments for The Poverty Alleviation in Indonesia. The 23rd International Conference of The System Dynamics Society Massachussets Institute of Technology (MIT), Boston.Google Scholar
  16. Mohamad, M. H. (2012). Wakaf tunai: Pendekatan terbaik untuk mewakafkan harta masa kini. Berita Harian.Google Scholar
  17. Mohammad, M. T. S. H. (2008). Sustaining the Means of Sustainability: The Need for Accepting Wakaf (Waqf) Assets in Malaysian Property Market. A Paper Presented in the 14 Annual Conference of the Pacific Rim Real Estate Society, Kuala Lumpur, Malaysia.Google Scholar
  18. Mohammad, M. T. S. H. (2011). Towards an Islamic Social (Waqf) Bank. International Journal of Trade, Economics and Finance, 2(5).Google Scholar
  19. Osman, A. F., Htay, S. N. N., & Mohammed, M. O. (2012). Determinants of Cash Waqf Giving in Malaysia: Survey of Selected Works. Retrieved on June 17, 2014, from, http://irep.iium.edu.my/28284/1/DETERMINANTS_OF_CASH_WAQF_GIVING_IN_MALAYSIA.pdf.
  20. Pitchay, A. A., Mydin Meera, A. K., & Saleem, M. Y. (2014). Priority of Waqf Development among Malaysian Cash Waqf Donors: An AHP Approach. Journal of Islamic Finance, 3(1), 13–22. http://doi.org/2289-2117(O)/2289-2109(P).
  21. Sadeq, A. M. (2005). Awqaf in Bangladesh. In Rashid S. Khalid (Ed.), Waqf Experience in South Asia.Google Scholar
  22. Sadeq, M. A. H. (2002). Waqf, Perpetual Charity and Poverty Alleviation. International Journal of Social Economics, 29(1/2), 135–151,  https://doi.org/10.1108/03068290210413038.CrossRefGoogle Scholar
  23. Stibbard, P., Russell, Q. D., & Bromley, B. (2012). Understanding the Waqf in the World of Trust. Trust and Trustee, 18(8), 785–810.CrossRefGoogle Scholar
  24. Syed Adwam Wafa, S. M. G. (2010). Development of Waqfs for Education in Malaysia. A Working Paper Presented in 7th International Conference—The Tawhidi Epistemology: Zakat and Waqf Economy, Bangi. Google Scholar
  25. Yusof, M. F. M., Yusof, M. F. M., Hasarudin, M. H., & Romli, N. (2014). Cash Waqf and Infaq: A Proposed E-Philanthropy in Malaysia. Jurnal Kemanusiaan Bil, 22, 1; and their Accounting Practices, http://journal.mufad.org/.

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • M. Mizanur Rahman
    • 1
  • M. Nurul Islam Sohel
    • 1
  1. 1.Islami Bank Training and Research Academy (IBTRA)DhakaBangladesh

Personalised recommendations