Theoretical and trustees’ perspectives on the establishment of an Islamic social (Waqf) bank

Abstract

Purpose – This paper aims to present an alternative to current banking systems. The purpose of the paper is the optimisation of the concept of cash waqf and its management in the framework of a waqf bank and its viability. Design/methodology/approach – The study is doctrinal and empirical. Several assumptions concerning the structure and operation of the bank are made, surveyed and descriptively analysed. Findings – The concept of cash waqf could be used for the operation of a waqf bank. There was a tendency among the given group of practitioners towards a corporate international social bank, capitalised by the waqf and non-waqf assets, sought after from the public and private sectors, as well as the Muslims and non-Muslims. Research limitations/implications – Assumptions are basic. Empirical findings are based on the perspective of waqf trustees. Other stakeholders’ perspectives need further research. Practical implications – The study is expected to persuade for, and assist in the establishment of a waqf bank. Social implications – This paper could contribute to the effectiveness of waqf institutions in their delivery of public good to the poor and society. These implications are not restricted to a specific country. Charities and the poor of any society may benefit from this study if the idea of total social banking is upheld. Originality/value – This study is the first to address the structure and operation of a waqf bank empirically.

Critical assessment of Islamic endowment funds (Waqf) literature: lesson for government and future directions

“… Hamza (2017) An efficient cash waqf structure is needed for allocating funds for investment and considering the temporary impact on the risk level of liquidity, payments, investments, and bank costs of funds. Mohammad (2015) A cash waqf can be utilized as a waqf bank operation. Non-bank Finance Hasan and Sulaiman (2016) Islamic Real Estate Investment Trusts (I-REITs) can be adopted by waqf institutions as a mechanism to finance their waqf asset development.…”

“…(2016) Abdullah and Ismail (2017) Hamber and Haneef (2017) Zabri and Mohammed (2018) Banking Ramli and Jalil (2014) Darus et al. (2017) Hamza (2017) Mohammad (2015) Non-bank Finance Hasan and Sulaiman (2016) Rahman and Ahmad (2011) Zakaria et al. (2013) Abdullah and Saiti (2016) Thaker and Thaker (2015) Sulaiman et al.…”

“… Hamza (2017) argued that an efficient cash waqf structure is needed to allocate funds for investment and for considering the temporary impact of the risk level of liquidity, payments, investments, and the cost of bank funds. Mohammad (2015) found that a cash waqf can be utilized as a bank waqf operation.…”

“…This collaboration can also reduce poverty ( Haneef et al., 2014 , 2015 ; Ahmed and Salleh, 2016 ), reduce the gap between the rich and the poor ( Rahman and Ahmad, 2011 ; Zakaria et al., 2013 ), increase financial access ( Hamber and Haneef, 2017 ; Moh'd et al., 2017 ; Abdullah and Ismail, 2017 ; Hamber and Haneef (2017) ; Zabri and Mohammed, 2018 ), create new banking products ( Ramli and Jalil, 2014 ). and possibly establish waqf-based banks ( Mohammad, 2015 ) that are distinct from other common banks. Moreover, awqaf can support the social and basic needs sectors, such as education and health ( Mahamood and Rahman, 2015 ; Shamsudin et al., 2015 ) and agriculture ( Shafiai et al., 2015 ; Orbay, 2012 ).…”

Waqf for Socio-Economic Development: A Perspective of Ibn Khaldun

“…Therefore, it is mentioned to offer justice to more people (Abdul-Karim, 2011). In many literatures, waqf is proposed to become the alternate solutions of conventional financial and micro-financing systems (Mohammad, 2015). Waqf is expected to be an economic institution, property, activity or fund to promote socio-economic development.…”