Cash waqf as an approach to philanthropy

Cash waqf, is categorised as a special type of endowment which is different from the ordinary real estate waqf. Its original capital, asl al-mal or corpus consists, fully or partially,  of cash. The word waqf (plural awqaf) comes from an Arabic root verb waqafa meaning "to prevent or restrain" or "to cause a thing to stop and stand still" - it literally implies "confinement and prohibition". As a terminology of Islamic jurisprudence, it may be explained as an act of refraining from the use and disposal of any asset from which one can make use of its proceeds for any charitable purpose as long as it exists. A second meaning is simply philanthropic foundation. Philanthropic foundations are known in the Islamic world as waqf or habs. In theory and practice real estate, furniture or fixtures, other movable assets and liquid forms of money and wealth such as cash and shares can be pledged as waqf. Cash waqf can be a financing method to develop Waqf property or to support and build institutions like schools, health centres or orphanage houses. It is argued that cash Waqf can pool more resources and wide participation of individual donors.

The first cash waqfs were approved by the Ottoman courts as early as the fifteenth century. By the end of the sixteenth, they had become the dominant form of waqf all over Anatolia and the Balkans. The legality of cash waqfs from the Balkans to the Malay thus implies a general acceptance by all the major schools of Islamic jurisprudence. Later research has revealed that cash waqfs exist in Syria, Egypt, Sudan and Aden. In Egypt, waqf of movables has been permitted by the law number 48, dated 1946. Moreover, the diffusion of cash waqfs is far more extensive than once presumed: they have been observed in the Ural-Volga region; in the subcontinent they are considered to be legal since 1913; in Iraq, there is a fatwa, issued by the celebrated Mujtahid of Karbala, permitting them; in the Islamic Republic of Iran the famous waqf Astan-e Qods-e Razawi purchased shares in various industrial complexes thus establishing cash waqfs. In Iran, they have been permitted by the May 17, 1986 Cabinet Decree, Article no. 44; and finally they have been observed in the Malay world and in Singapore.

BANGLADESH SCENARIO: According to 1986 census of Waqf estate, there were  l,50,593 Waqf estates in Bangladesh having multipurpose use. According to 1983 mosque census, there were 1,31,641 mosques in Bangladesh out of which 123,006 mosques were Waqf properties. According to this census, Cumilla had the highest number (9,841) of Waqf estates followed by Mymensingh (5,659) and Chattogram (5,535). Bandarban had the lowest number of Waqf estates (201). Out of the total Waqf estates, 97,046 were  registered, 45,607 verbal and the remaining 7,940 Waqf by tradition. Cumilla had the highest number of registered waqf (15,171) followed by Mymensingh (4,953). On the other hand, Satkhira  had the least number of Waqf (41). Out of these large Waqf estates, only 13,200 estates were under the administrative control of Waqf Administrator out of which 10,683 were of mixed nature.

The waqf estates in which more than 50 per cent of the income is spent on religious and charitable purposes, are treated as public waqf.

Waqf institutions in Bangladesh face numerous problems which include inadequate manpower, occupation and misappropriation of waqf properties, subscriptions remaining unrealised, uncollected arrears, violation of the Waqfs Ordinance 1962, personal use of the waqfs' compensation money, etc.

The trend of waqf endowments in Bangladesh is pathetically negative at present though there is no dearth of laws for managing and administering waqf properties. But no policy has yet been formulated for ensuring sustainable good governance and better management of waqf entities. 

 Considering the multifarious problems in handling waqf property, the cash-waqf system has become popular, particularly because of its flexibility which allows distribution of waqfs' potential benefits to the poor.

The floating of Cash-waqf Certificate as a financial instrument by Social Islami Bank Ltd. (SIBL) in 1997 is an innovation in the history of Islamic finance. It has settled the age-old controversy among scholars concerning the concept of perpetuity and inalienability associated with waqf property since its implementation during the Ottoman Empire in the early 15th century.

The  objectives of Cash-Waqf Certificate are as follows:

(i) To provide banking services as facilitator to create cash-waqf and to assist in the overall management of waqf;

(ii) To assist in mobilisation of social savings by creating cash-waqf with a view to commemorating deceased parents and children;

(iii) To increase social investment and transform social savings into social capital;

(iv) To benefit the general public, especially the poor sections of the people, out of the resources of the rich;

(v) To create awareness among the rich regarding their social responsibilities towards the disadvantaged people;

(vi) To assist in developing social capital market;

(vii)      To assist in overall development efforts of the country and to make a unique integration between social security and social peace;

(viii)     To empower people at the grassroots level and to open up new frontiers of human freedom that includes freedom from educational, social and economic deprivations.

Dr Muhammad Abdul Mazid is a former Secretary to the Government and Chairman, NBR.

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