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Thursday, 6 December 2012

Waqaf, zakat are areas of growth in Islamic finance

Waqaf and zakat (tithe) management are among areas of growth for Malaysia as the global hub of Islamic finance, according to Fajr Capital Ltd chief executive officer Iqbal Khan.

“There are a lot of areas of growth in the Malaysian Islamic finance as the country is well positioned for this purpose and the regulations are already in place,” he told reporters after giving a public lecture on “Our Markets, Our Values — A principles-based approach to creating value in Muslim majority markets” in Kuala Lumpur yesterday. The lecture focused on the developments and key issues in the Muslim-majority markets including values which had fundamentally driven the history and development of the Islamic finance industry.

Earlier in September, Bank Mualamat Malaysia Bhd had tied up with Perbadanan Wakaf Selangor to enable its customers and the public to contribute cash to waqaf.

Kicking off the fund, Bank Muamalat had made a RM1 million contribution, while the bank employees had chipped in RM75,040 to be mainly chanelled to improve and develop health and education.

In 2010, Maybank Islamic Bank Bhd had launched Waqaf, a structured community-giving initiative that allows its customers and the public to make waqaf contributions through its payment channels.

It had then signed a memorandum of understanding with Yayasan Waqaf Malaysia. It is understood that in the latest Bank Muamalat venture, the bank also plays a role in the management of the funds.

Besides that, Iqbal added another area of growth includes the corporate social responsibility (CSR) sukuk where Malaysia can excel and become the role model economy which can create a good demonstration effect for other countries.

He said the CSR sukuk can be issued by any institution or government which have got long-term commitment budgeted for CSR causes for the next five to 10 years.

“What the CSR sukuk will do in the current climate is to create the funding for priority social sector initiatives like others. I hope Malaysia will be again the first one to issue such a sukuk,” he said.

He said previously, there was such a CSR sukuk done in the conventional format including debt for equity swaps and debt for CSR swaps including bond issuance for the purpose of vaccination on budgeted commitment of the Organisation for Economic Cooperation and Development and Bill & Melinda Gates Foundation.

Meanwhile, the Securities Commission (SC) held a public lecture in Kuala Lumpur yesterday by Iqbal, who is a recipient of the prestigious Royal Award for Islamic Finance 2012.

(The Malaysian Reserve / 04 Dec 2012)

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