Cash Waqf Deposit Product: An Innovative Instrument of Islamic Banks for Socio-Economic Development in Bangladesh

  • M. Mizanur Rahman
  • M. Nurul Islam Sohel


Cash waqf is a modern dimension of waqf which was developed during the lifetime of Prophet Mohammad (saw) although it has not been practiced that much. In Islam, land was the first waqf, which has been randomly used in different countries of the world, including Bangladesh. But, according to 1986 census of waqf estate, there are thousands of waqf estates in Bangladesh which are neglected and sloppily maintained, underdeveloped and are devoid of any dynamic futuristic developmental plan. Some of these valuable waqf properties, especially the lands, are being leased out with nominal charges or sold out for insignificant prices. The annual income of the waqf estates is Tk. 906 million while the expenditure Tk. 856 million. The net collection is Tk. 50 million only, which is very insignificant in respect of the potentiality of the estate. Besides, the challenges of the waqf institutions are numerous and of enormous magnitude, therefore, Social Islami Bank Limited (SIBL) in 1997 has developed cash waqf model. Presently, cash waqf is a well-established alternative method of waqf. Twelve commercial banks (six Islamic and six conventional banks) in Bangladesh have been practicing cash waqf, and the fund is channeled through educational, social, and cultural development of the country. This study aims to describe the Mudarabah Cash Waqf Deposit Product and Certificates and its contribution toward socio-economic development of Bangladesh. Both qualitative and quantitative data were collected from the secondary sources and also by interviewing the clients and beneficiaries by using semi-structured schedule. As a case study, the operational thrust of the banks is reviewed to provide real-life evidence of the process of floating a Cash waqf Bank Deposit Product and its Certificate. Study shows that this voluntary-sector savings and investment mobilization can help Islamic banking for economic development of the country. Study also reveals that the Cash waqf Bank Deposit and Certificate has been monetizing the Islamic voluntary sector and helps accumulate social capital and national wealth, socio-economic development, and poverty alleviation of the country. While the indirect tax system of the country is favorable to its growth, political will is needed for the success of this form of waqf.


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© The Author(s) 2019

Authors and Affiliations

  • M. Mizanur Rahman
    • 1
  • M. Nurul Islam Sohel
    • 1
  1. 1.Islami Bank Training and Research Academy (IBTRA)DhakaBangladesh

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