KUALA LUMPUR/SYDNEY Feb 27 India's Ministry of
Minority Affairs has enlisted a Kuala Lumpur-based body to help
develop Islamic endowments, or awqaf, aiming to mobilise a large
pool of assets in a country that is home to one of the biggest
Muslim populations in the world.
The World Islamic Economic Forum Foundation, which organises
conferences and workshops on Muslim business around the world,
will hold a roundtable later this year to discuss ways to
improve management of India's estimated 490,000 waqf properties.
Institutions such as the Jeddah-based Islamic Development
Bank, Malaysia's Hajj Pilgrim Fund and its largest
state-owned fund manager Permodalan Nasional Bhd will attend the
event, the WIEFF says.
Awqaf exist around the world, receiving donations from
Muslims to operate social projects such as mosques, schools and
welfare schemes. They have amassed huge holdings of real estate,
commercial enterprises, cash, equities and other assets.
But in many cases the management of these assets remains
primitive; money is often tied up in property or bank deposits
that earn miniscule or even zero returns, imposing economic
costs on local economies.
India, with an estimated 177 million Muslims, has a large
base of awqaf but many of their assets are far from being
employed efficiently; their estimated annual income is just 1.63
billion rupees ($26.3 million).
Last month, Indian Prime Minister Manmohan Singh inaugurated
the National Wakaf Development Corporation, which the Ministry
of Minority Affairs established to help management of the
properties become more transparent.
"There is now increased government recognition, but also
support for this. These things you cannot do effectively without
the legislative support," WIEFF secretary-general Fuzi Abdul
Razak told Reuters.
Efforts to strengthen India's awqaf could conceivably be a
precursor to developing an Islamic banking sector in the
country; its secular laws still largely forbid the selling of
"At the highest level of policy-making, they are getting
more information and looking at countries which have done
Islamic banking successfully. There is increased interest for it
now," said Abdul Razak.
Last year, India's central bank allowed a firm in the
southern state of Kerala to operate as a non-banking financial
company following sharia principles, a small step towards
developing Islamic finance.
However, such efforts have in the past met strong opposition
from bureaucrats in the finance ministry and banking circles.
Some politicians, especially from the opposition Bharatiya
Janata Party, have said they fear Islamic banking could be used
by militants and strengthen the hold of clergy over India's
($1 = 61.9850 Indian rupees)
(Reporting by Al-Zaquan Amer Hamzah in Kuala Lumpur and
Bernardo Vizcaino in Sydney; Editing by Andrew Torchia)