Six Islamic banks collaborate to develop waqf fund

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KUALA LUMPUR (Sept 8): Six Islamic banks have agreed to jointly develop a waqf fund focused on projects in four areas — economic empowerment, education, health and investment.

The banks — Affin Islamic Bank Bhd, Bank Islam Malaysia Bhd, Bank Muamalat Malaysia Bhd, Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat), Maybank Islamic Bhd and RHB Islamic Bank Bhd — have signed a Waqf Fund Strategic Collaboration Agreement.

In a statement, the Association of Islamic Banking Institutions Malaysia (AIBIM) said waqf has great potential in developing the economy of Muslims, noting the many potential waqf lands for development and generous members of society who are willing to contribute.

"The Islamic banks, with the existing infrastructure, risk and banking expertise, will join forces to generate positive and sustainable impact to the economy, community and environment," said AIBIM president Datuk Mohd Redza Shah Abdul Wahid.

"Therefore, Islamic banks intend to support the efforts of the State Islamic Religious Councils as the sole trustee of waqf by jointly identifying high-impact projects to develop and maximise the use of banking channels for our customers to participate by contributing funds to develop the identified projects," he said.

Currently, eight state councils have agreed to participate in the project, which will establish a joint management committee with the participating Islamic banks to closely monitor the project.

AIBIM will be issuing a Code of Governance and Administration as guiding principles for the participating banks to ensure good governance.

"This includes disclosure on requirements and reporting to donors and funders which are comparable to those of other Islamic banking operations," said Mohd Redza.

The initiative is targeted to be launched in the fourth quarter of 2017, following which Malaysians will be able to use the banking channels of the six banks to participate in the development of identified waqf projects.