KUALA LUMPUR, Sept 24 (Reuters) - Malaysia'ssharia-compliant banks should be roped in to manage thecountry's 1.2 billion ringgit ($375 million) worth of propertiesheld as Islamic endowments, a top banker in the sector said onTuesday.
Prime Minister Najib Razak announced this month that theMalaysian Wakaf Foundation will be turned into a corporateentity to derive more value from assets held by the trust.
"Wakaf should be professionally managed by those holding theright qualifications," Badlisyah Abdul Ghani, chief executive ofCIMB Islamic, the Islamic arm of CIMB Group Holdings Bhd, told reporters on the sidelines of a conference inKuala Lumpur.
The move to open wakaf (endorsement) management to theprivate sector may boost business for Malaysia's Islamic bankstowards growing their share of the country's total bankingassets to 40 percent by 2020 from 24.1 percent presently.
Wakaf operates social projects such as hospitals, mosquesand schools with donations received from Muslims in the form ofland, cash or other valuables. Poor financial returns and a lackof economic efficiency led to a review of Malaysia's wakaf bythe government, Reuters reported in March.
"What is missing in the market today is wakaf done in acommercial manner. We need an effective legal framework thatwill allow wakaf to be done in the financial market,"
"I am hoping the framework that they come up with will helpfacilitate its application as a component of the Islamicfinancial market, and allow industry players to come onboard asprofessional wakaf managers."
The Malaysian Wakaf Foundation is still considering theinvolvement of banks and corporate entities. It will meet thegovernment's Economic Planning Unit this month to finalise itsimmediate plans, a source told Reuters.($1 = 3.1990 Malaysian ringgit) (Reporting By Al-Zaquan Amer Hamzah; Editing by Kim Coghill)
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