CASH WAQF DEPOSIT: AN INNOVATIVE PRODUCT FOR ISLAMIC BANKS.

INTRODUCTION.

There has been several calls from Sharia scholars, Islamic economists and researchers among others for Islamic banks to innovate new financial products that caters for social needs of the society rather than mimicking those of conventional finance. Habib Ahmed on his book "Product Development in Islamic Banks" quotes Dr. Mohammed Obaidullah saying, 'The so-called mainstream Islamic Banking and finance is a sham, targeted at high net-worth individuals and corporations against true Islamic ideals and spirits, a poor attempt to disguise conventional products in Islamic garb.'

According to Habib, other than Islamic economists and scholars, many other stakeholders of the industry expect the Islamic financial sector to play social role by developing products that are 'Sharia-based product' which fulfils both Sharia and social requirements. It is in my opinion that Cash Waqaf Deposit Account or certificate is an innovative product that meet such requirements.

WHAT IS CASH WAQF?.

There is considerable discussions and researches on the subject of Cash Waqf to date and so is the meaning and definitions. Taking note of various definitions that may exist, i hereby provide three definitions.
1. According to Dr. Ahsence Lahsasna Cash Waqf "is mobilization funds from donors base on perpetuity and investing them in productive assets that provide either usufruct or revenues for future consumption by individuals or groups by taking into account the policy and guideline provided by the donors and receivers."
2. According to Majid Khademolhoseini, Cash Waqf "means the dedication of some money from one's possessions and establishing a Waqf based on that amount and offering it to the benefit of people generally or allocating it to make use of them by some segments of the community particularly." Majid quote Abdel Mohsin definition as "the devotion of an amount of money by a founder and the dedication of its usufruct in perpetuity to the prescript purposes."
3. According to Muhammad Ridhwan Ab. Aziz, "Cash Waqf are charitable endowments established with cash capital. What distinguishes these from the standard real estate endowments is the nature of their capital, corpus, which is in the form of cash. The corpus of the real estate waqfs, by contrast, is in the form of real estate. Thus, whereas a well to do Muslim normally endows his real estate and channels its rent revenue for charity, in the case of a cashwaqf, not real estate but cash is endowed and the revenue generated out of the investment of this cash is then channelled for charity(Murat Cizakca, 2004)."

PERMISSIBILITY OF CASH WAQF.

According to Haslindar Ibrahim et al,"There is no direct injunction in the Quran about waqf. However, there is a hadith reported by Ibn Umar, whereby Umer Ibn Al Khitab acquired land in Khyber and went to Prophet Muhammad, Peace Be Upon Him (PBUH), and sought advice regarding the land. The Prophet (PBUH) advised that the land should be made inalienable and the profit given to
charity. Therefore, waqf is perceived as a permanent dedication by a Muslim of any property for a good faith purpose that is recognized as being pious or charitable." The indirect injuctionS can be cited on Qur'an Chapter3 verse 92 and 2:177. Chapter 3:93 states "by no means shall you attain righteousness unless you give what you love and whatever you give, Allah know it all." Prophet salallahu alayhi wasallam reported to have said;"When a man dies, his acts comes to an end except three things;recurring charity, knowledge by which people benefit and pious offspring who prays for him." Majority of jurists understood recurring charity serves as the basis of Waqf.

In regards to Cash Waqf, Abu Daud and Nasa’i said that:“A man said to Prophet Muhammad salallahu alayhi wasallam, I have a dinar money. Thus the Prophet PBUH said you donate (waqf) your dinar money to yourself”. This hadith is taken as an evidence of Cash Waqf. At this point it is crucial to note in full what Haslindar Ibrahim et al has to say on Cash Waqf ruling;" The Islamic schools of thought, consisting of Imam Shafie, Hanafi, Hambali and Maliki, jointly agreed to allow waqf for moveable property (Abdullah, 2010). This is because all moveable property can be sold, which can receive benefit in return as well as retain its physical condition. As a result, cash waqf is permissible. Furthermore, pious Az Zuhri, who is well known for his Islamic knowledge, ruled that waqf in the form of dinar (money) is allowed for the sake of Islamic purposes, the welfare of society and development of the ummah (people). In Malaysia, the Malaysian Islamic National Council Ruling (Majlis Kebangsaan Hal Ehwal Agama Islam Malaysia), which having a meeting from 10 to 12 April 2007, at Kuala Terengganu, agreed to allow the practice of cash waqf."

CASH WAQF DEPOSIT ACCOUNT OR CERTIFICATE.

Cash Waqf Deposit is one of the product (sometimes referred as model) developed using Waqf contract. Cash Waqaf as a bank deposit product was firstly introduced by Social Investment Bank now called Social Islami Bank in Bangladesh through the issuance of Cash Waqf Certificate. According to Dr. Mannan, the purpose of this product was to provide the public with an opportunity to mobilise social capital for social investment and welfare. The value proposition of the product is clearly stated by Social Islami Bank (SIBL) as "By opening a Cash Waqf Deposit A/C some one can get an opportunity to do welfare to the mankind through Sadaka-e-Jariah (recurring charity). SIBL urges to all religious & affluent persons of the society to come forward to mobilize Cash Waqf Deposit so that the profit may be utilized for the well being of mankind."

Another bank by the name of Islamic Bank Bangladesh (IBBL) also offers this product with detailed information on its website. Explaining the aim of the product,"It provides a unique opportunity for making investment in different religious, educational and social services. Savings made from earnings for the purpose of Waqf by the well-off and the rich people of the society can be mobilized throughthis scheme and the income to be generated therefrom may be spent for different benevolentpurposes. Through the scheme we may contribute to popularize the role of Waqf in the country including Cash Waqf which can be instrumental in transferring savings of the rich to the members of the public in financing various religious, educational and social services in Bangladesh."

Currently, the product is widely available in Bangladesh offered by SIB,IBBL, EXIM BANK, BANKASIA, Shahjalal Islami Bank, Al-Arafah Islami Bank, Prime Bank among others and in Malaysia it is offered by Bank Islam. According to Majid Khademolhosein, the procedure is as follows:
• The founder deposits money into Cash-Waqf based account in the bank (not allowed to withdraw in order to meet Sharia requirement of Waqf-being perpetual)
• While depositing the money, the founder will be given a list of the Beneficiaries whereby he can chose or specify his/her Beneficiaries.
• The bank will act as a Mutawalli and will invest the capital through Mudharabah Contract.
• The revenue generated will be channeled to charitable purposes or purposes specified by the founder.

CONCLUSION.

It is clear that Cash Waqf deposit product is a fantastic and innovative product with great potential in mobilizing social capital for social investment, poverty alleviations and welfare. Since it was launched in Bangladesh, the product has recorded remarkable growth overtime and send positive signals if adopted in other countries. Therefore, Islamic Banks around the world should have Cash Waqf deposit product that enables them to fullfill social goals in an economical way rather than depend on shareheolders money alone to fulfill bank's social responsibility.