Islamic Financial Institutions Urged To Develop Products, Services For Social Welfare Sector

KUALA LUMPUR, Sept 4 (Bernama) -- Islamic banking and financial institutions should develop products and services for the social welfare sector as they gear up for the Islamic finance industry, said former banker Datuk Dr. Abdul Halim Ismail.

He said it is crucial to develop products and services to facilitate the flow of funds raised from the public and private sectors to help the poor and needy in the social welfare sector.

Hence, he proposed the promulgation of an Act of Parliament and Bank Negara Malaysia guidelines such as licensing of 'Sadaqah Houses'.

Abdul Halim, who received the Royal Award for Islamic Finance 2014 on Tuesday, said like a Takaful company, a Sadaqah House provides products and services to collect various types of charities such as 'Sadaqah' (alms), 'Waqf' (endowment) and 'Hibah' (grant).

"A Sadaqah House might be a foundation set up by the owner or a subsidiary company of the owner.

"What is important is that a Sadaqah House is owned and controlled by a banking group or any other organisation given the licence," he said at a public lecture as the Royal Award recipient in conjunction with the Global Islamic Finance Forum here today.

Abdul Halim, who was former Bank Islam managing director, said through the Sadaqah House, industry players could offer charity-related products categorised as 'Sadaqah Jariah', charity that will last in perpetuity.

He said Sadaqah Jariah is crucial for givers and receivers as 'hereafter investment' as well as a long-term sustenance and poverty eradication.

The Royal Award is spearheaded by Bank Negara Malaysia and the Securities Commission Malaysia on the initiative of the Malaysia International Islamic Financial Centre.

Abdul Halim was named the Royal Award recipient for his pivotal role in establishing the organisational structure and operating procedures of the country's first Islamic bank in 1983.

The former dean of the Faculty of Economics, Universiti Kebangsaan Malaysia, Abdul Halim's expertise in Syariah law and Islamic banking has put him in good stead to sit in Syariah boards of regulators in Bank Negara Malaysia, the SC, and the Labuan International Business and Financial Centre.


We provide (subscription-based) 
news coverage in our
Newswire service.