Islamic Wealth Management Landscape and Overview of Corporate Waqf - - PowerPoint PPT Presentation

LIBFC MASTERCLASS Islamic Wealth Management Sime Darby Convention Centre 24TH October 2018

Islamic Wealth Management Landscape and Overview of Corporate Waqf By Dr Shamsiah Abdul Karim SVP Bank Muamalat Malaysia Berhad

Content

• Islamic Wealth Management Landscape
• Overview of Corporate Waqf

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Islamic Wealth Management in its holistic manner entails services which are in line with the 5 foundational goals of Maqasid al-Shariah which places the importance in preservation

• f:

Background

ISLAMIC WEALTH MANAGEMENT & MAQASID SHARIAH

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Islamic scholars in Islamic finance have attempted to elaborate on the objective of wealth and financial transactions and a contemporary Islamic scholar (Laidin) postulates 5

• bjectives which are:

Background

MAQASID SHARIAH

Continuity of the circulation of wealth Continuity of the investment of wealth Achieving comprehensive communal prosperity Financial transparency Validation of financial

• wnership

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Bank Muamalat Malaysia Bhd joined the Global Alliance for Banking on Values (GABV) network as the first Islamic bank in the world in January 2018 Being an Islamic bank, Bank Muamalat carries greater responsibilities to influence social change and creating values to the people, over and above its usual profit oriented banking activities

Background

The GABV journey…

• As the global Islamic fund and wealth

management sector continued to experience growth due to the increasing affluence of Muslim communities who wish to invest surplus funds in a Shariah- compliant manner and non-Muslim investors’ wish to diversify their investment through Shariah-compliant funds, more innovative and comprehensive products and services are being offered. One such possibility is through Islamic Wealth Management (IWM).

Islamic Wealth Management Landscape

Islamic Wealth Management Landscape

Islamic Wealth Management Landscape

Islamic Wealth Management Landscape

Gross domestic product (GDP) of the member countries of the Organisation

• f Islamic Cooperation (OIC) is forecast to grow by 4.1% on average,
• utpacing the world average of 2.6%, while Muslims are projected to

represent 26% of global population in 2030 from 23% in 2016 . It is also projected that Muslims will represent 27.3% or 1.3 billion population in Asia-Pacific where, by 2030, the majority of the world’s middle class will be living in the Asia Pacific region

Islamic Wealth Management Landscape

Malaysia’s operates within a well-established and facilitative regulatory environment based on principles of securities regulation which are aimed at ensuring protection of investors, maintaining fair, efficient and transparent markets, and reducing systemic risks. The regulatory framework is further complemented by Shariah governance Strengthen Malaysia’s positioning as a global hub for Islamic funds Establish Malaysia as a regional centre for Shariah-compliant sustainable and responsible investment Develop Malaysia as an international provider

• f Islamic wealth

management services

Critical Success Factor for Islamic Wealth Management

(Going Borderless)

Traditionally bank branches are filled with tellers and counters Long queue are formed and require intensive manual labor to fulfill daily transactions Digital branch, minimum teller, virtual Teller after working hours, face recognition and retail shop concept Coupled with formidable cyber banking facilities, customers are now able to perform many transactions

• nline and has reduced the dependencies on actual tellers

Islamic Wealth Management Financial Fairness Inclusiveness Ethical Better Risk Reward Relationship

Islamic Wealth Management- Going Holistic



Example: Creates joint ownership and togetherness under the concept of Takaful. Profit sharing under mudharabah and etc



Able to meet both Muslim’s and non- Muslim’s financial needs eliminating financial borders and boundaries



Restrict non shariah investment i.e. into alcohol, tobacco, gambling which are harmful given any religion



Investments are approached cautiously and the decision- making process is carried out thoroughly

Proposal

Wealth Creation Wealth

Accumulation

Wealth Protection Wealth Purification Wealth Distribution

Gold

Regular Family Takaful, General Takaful and Unit Trust Family and General Takaful Unit Trust

Gold

ASNB Non-Financial Services & Wakaf Wasiat (AS-Salihin & ARB) Childhood Young Adult Adult Parenthood Empty Nester BMMB IWM Cycle

BMMB IWM Cycle

Corporate Wakaf Model

• Traditionally waqf are managed by Govt entitiy. Example in

Malaysia the waqf is governed and manage by the Majlis. Juxtapose with Trust it is set up by the Trustee

• 1) Corporate wakaf – Waqf set up as a corporate entity
• Labuan waqf foundation has created such legislation and creation
• f waqf to mirror the corporate nature of running a waqf.
• 2) Corporate waqf – create waqf out of the profit received.
• 1) As a corporate entity – eg hospital waqf , university, etc
• 2) The bank currently is creating waqf out of its profit and

facilitating the collection and management of waqf with collaboration with Majlis Agama.

Bank Wakaf Model

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MAJLIS AGAMA ISLAM SELANGOR (MAIS) JAWATANKUASA PENGURUSAN BERSAMA (JPB)

PENGERUSI YBHG TAN SRI DATUK SERI PANGLIMA DR ABDUL RAHMAN ARSHAD

SETIAUSAHA

DATO HJ MOHD REDZA SHAH ABDUL WAHID (CEO, BMMB) TN HAJI AZIZI BIN CHE SEMAN (PENGERUSI JAW SHARIAH BMMB) TN HJ. MOHD HAFIZ FAUZI (KETUA JAB. DAKWAH WAKAF & ZAKAT, BMMB) SS DATO’ SETIA MOHD TAMYES ABD WAHID

(ALP PWS & MUFTI SELANGOR)

YM DATIN PADUKA UNGKU ARFAH UNGKU TAHIR (ALP PWS) EN ANUAR HAMZAH TOHAR (TIMB CEO, PWS)

Wakaf Selangor Muamalat – Governance Structure

JPB Terms of Reference

Terms Reference

Governing Authority

• i. Enacment Majlis Agama Islam Negeri ( Selangor )
• ii. Islamic Financial Svs Act ( IFSA 2013)

Roles and Responsibility

• f members of

JPB

• i. JPB to call for periodical meeting ;
• ii. Authorise to make decision based on 2/3 quorum;
• iii. Given the authority to create policy with regards to

WMM fund;

• iv. Authorise to implement policy or decide on any

matters relating to the collection, disbursement and usage of the fund

• v. Authorise to supervise on the cash flow of funds; and
• vi. Responsible to MAIK –to inform and receive

instructions.

Bank Muamalat Wakaf Model

Mauquf Infrastructure Hospital Equipment Computers Investments

Properties Shariah Compliant Investment

Usage Usage Usage Rentals, dividends contribute

Allocation of Funds MYR 24M – as at Aug 2018

Allocation

Health Education Poverty alleviation Investment

Investment – Sustainability issues

• The waqf needs a sustainable income for its

beneficiaries

Mauquf (Capital) Rental Dividend, returns Mauquf Alaih ( beneficiaries )

Waqf beneficiaries

• Beneficiaries hit 3

sustainable UNDP goals

• Health
• Education
• Poverty through

economic and social empowerment programme

Collaboration with Hospitals Collaboration with Community Prevention , medical intervention and after care Prevention Medical Intervention After care Mobile clinic Health screening Dialysis machine Amputation wad Recovery, Hospice Burial

Syukran and Wassalam

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Disclaimer

This presentation should not be regarded as offering a complete explanation of the matters referred to and is subject to changes in law. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Labuan IBFC cannot accept any responsibility for loss occasional to any person acting or refraining from action as a result of any material in this presentation.

LABUAN IBFC INC SDN BHD IS THE OFFICIAL AGENCY ESTABLISHED BY GOVERNMENT OF MALAYSIA TO POSITION LABUAN IBFC AS THE PREFERRED INTERNATIONAL BUSINESS AND FINANCIAL CENTRE IN ASIA PACIFIC