Waqf Bank Discussion Series: An Operational Structure Development for Economic Growth in Malaysia

Waqf is an Islamic financial mechanism that can improve the quality of the Islamic financial system. The Islamic banking system's operation using waqf practices such as creating waqf banks (WB) can contribute to the development of the Islamic financial and economic system. However, until now, Malaysia still does not have a WB. In line with this, the main objective of this study is to propose a model that focuses on how to develop the new WB Operational Structural model, which has to be in line with shariah law. This study is a qualitative study using an exploratory design. This study involved the collection of primary and secondary data. Primary data were obtained through face-to-face interviews using semi-structured questions on waqf institutions executives, Islamic bank managers, and Muslim scholars to indicate WB operational structure development. Secondary data involves document sources such as books, magazines, journals, and others. The data were then analyzed by qualitative content analysis. The study results found that the bank endowment structure model should consist of the consumer banking department (CnBD), corporate banking department (CBD), and the bancassurance department. It is hoped that this bank wakaf model can be used as a guide for banks and national leaders in their efforts to develop a wakaf bank in Malaysia.


Introduction
WB has not been established yet in Malaysia. The need to develop this kind of bank is intensifying due to the current Malaysian economic condition (Ab Aziz, 2014a;Yusof, Ridhwan, et al., 2013;Yusof & Ab. Aziz, 2015), especially during this pandemic Covid-19. Most Malaysian lost their job because of the economic downturn. Thus, this research aimed to develop WB Operational Structure for Malaysia's economic growth. This research tries to merge the function of waqf institution, Islamic bank institution and takaful institution for improving Malaysian standard of living. Economic growth can be defined as expanding economic development by improving factors such as domestic and international policies, working conditions, health, education, and market environments in developing nations. It reviews both macroeconomic and microeconomic factors relating to the structure of a nation's expanding economy and in what way it can yield adequate domestic and international economic improvement (Philippe et al., 2009). Other than that, the amalgamation between waqf institution and Islamic financial institution which is a generosity based institution supposed to be the best solution for acquiring financial stability due to the landscape of these two financial institutions (Hachicha & Ben, 2015;Rawashdeh et al., 2017;Dusuki, 2008). This study, however, will focus on how to develop the new WB Operational Structural model which has to be in line with shariah law.

Literature Review
WB operational structure's systematic search has been performed based on the keywords *waqf*, *waqf bank* and *waqf bank operational structure*. The searching process was done by using six databases: Sage Journals, Wiley Online Library, EBSCOhost, Science Direct, Scopus, and Emerald Premium. As a result of the search, 78 hits (articles) are found, and only 15 articles were selected due to the related field of study.
Study shows that waqf institutions can empower Muslims' economic development (Darus et al., 2017;Mahat et al., 2015). Apart from that, the combination between Islamic financial institution and waqf institution, which is a philanthropy based institution said to be the best solution for acquiring financial stability due to the nature of these two financial institutions (Hachicha & Ben, 2015;Rawashdeh et al., 2017;Dusuki, 2008). According to Chowdhury et al. (2011), cash waqf will also aid in the reform of the current institutional setup and their networking relationships across the region, with the goal of improving their efficiency in the direction of effective and need-based dynamic management of waqaf affairs. On the other hand, cash waqf investment through the mudharabah contract is permissible in Islamic law. WB can apply this cash waqf investment practice as financial aids intended for the poor ( Ab.Aziz & Yusof, 2014b;Ridhwan et al., 2017). First, WB can disburse the ROI from cash waqf investment, dedicated to financial aids to the poor. The invested cash waqf can be perpetual as it is in line with waqf rulings. As a rule, productive waqf must be kept invested and an income-generating investment vehicle, which can be better in the banking system (Mohammad, 2011a;Mohammad, 2011b;Yusof, Ab. Aziz, et al., 2013). Today's Islamic banking activities prove that cash investment success is assured. The core characteristic of waqfs, such as perpetuity of the object or the capability of recurrent use and benefit, would apply to both the cash waqf and WB alike (Ab. Aziz & Yusof, 2019;Yusof & Ab. Aziz, 2015). The development of the WB operational structure as social welfare is needed in this century. Looking at the unsustainable economic growth, current banking systems, including Islamic banks, prove that this system cannot assist society. The gap between the rich and the poor is going wider. Inequality of income, the concentration of wealth in 20% of the global population, the high level of poverty in Muslim and other developing countries, and the increase in the number of older people in advanced society make a social bank's need urgent more than ever. The proposed WB can help the state provide decent living standards to its citizens, including shelter, education, healthcare, employment, and the like Ridhwan, et al., 2013)All paragraphs must be indented.

Methodology
This paper applied qualitative research methods and exploratory research design in a comprehensive study. This research has a conceptual framework that overlays the semistructured interviews, the study's data collection method. Semi-structure interviews were conducted with waqf institutions executive, Islamic bank manager and Muslim scholars to indicate WB operational structure development and continue until this study meets its saturation point.
Emails and messages were sent via online social media such as Facebook, Twitter and Gmail to the interviewee before the interview session started. This medium will give the interviewee a general idea regarding the interview context and prepare some relevant answer. Interviewees are only selected if they are an employee of waqf institutions, Islamic bank institutions and Muslims scholars. The data were then analyzed by qualitative content analysis.

Discussion and Findings
The WB Operational Structure This paper will briefly explain the WB operation team. To understand this subject matter, the researcher will briefly explain the operation team's component: consumer banking department (CnBD), corporate banking department (CBD), and bancassurance department.

Waqf Bank Consumer Banking Department
Services provided by the CnBD include saving and current accounts, mortgages, debit card, credit card, personal loan, and deposit certificate (Fan et al., 2018). CnBD is also known as the retail banking department that provides financial services for a consumer (Mullineux, 2009). This department's most important function is providing deposit, money management, and credit service to the customer (Patro, 2013).
This department provides extra liquidity to the consumer and the economy (Ali et al., 2014). This excess liquidity or extra credit allows the consumer to spend their future earnings at the present (Çokgezen & Kuran, 2015;Griffin et al., 2018). On the other hand, small and medium enterprises (SME) use this opportunity to expand their business since they have extra buying power (Tumwine et al., 2015). In Malaysia, all Islamic banking does have this department, and they do provide service as mention earlier, and this department operates in line with shariah law (Khan et al., 2008;Mushtaq & Siddiqui, 2016;Sufian & Zulkhibri, 2015;Zulkhibri, 2018). The service provided by the consumer department was not limited to Muslim consumer; this department also serves non-Muslim consumer (Mahdzan et al., 2017).
There were several advantages of CnBD stated in the literature. For instance, the CnBD provides a stable deposit, and safekeeping to the customer and this deposit was protected by insurance (Isazade, 2009;Kleftouri, 2014). Furthermore, the conventional bank retail banking department was insensitive to the interest charge to their consumer. This mean, there was no bargaining for a discount or additional interest (Corvoisier, Sandrine;Gropp, 2002;Williams & Prather, 2010). Islamic bank and conventional bank CnBD function as fund provider to the bank, resulting from customer deposits (Hamza & Saadaoui, 2013). From this department, the bank can improve the economy or help revival the economy by providing a fund to an entrepreneur through the corporate banking department (Iqbal et al., 2018). Thus, this action will increase the nation's productivity (Repousis, 2015).
In contrast, a few disadvantages of CnBD reported in the literature. One of the disadvantages of this department was monitoring the massive financing, such as house financing, car financing and personal financing needs. Thus, banks have to spend heavily on human resource and salary expenses (Ilmi, 2018;Balfour et al., 2015). Besides that, long term financing such as house financing in the absence of proper follow-up can be non-performing financing due to its long term repayment contract (Bandyopadhyay & Saha, 2011;Mohd Isa et al., 2018).

Corporate Banking Department
The CBD can be defined as a specialized department of a commercial bank that offers numerous banking services such as cash management, assets management credit management, and underwriting to large companies and SMEs. This department will assign specialized finance professionals who will help corporations achieve their business target (Abeysekera, 2011). This department is one of the bank primary sources of profit where this profit came from financing large corporation and SMEs (Abe et al., 2015;Narteh, 2013;Hussain et al., 2006).
The difference between CnBD from CBD is that CnBD provides loan and financing to the consumer while CBD provides loan and financing to a large corporation (Jing-bo & Ke-ke, 2011). The product that the corporate banking department provides to their corporate customers includes trade finance such as letters of credit, employer services such as payroll services, treasury services, loans and credit. Some banks provide internet banking services to their corporate customers (Chhina, 2016;Went, 2003).
Besides that, CBD provides a corporate account for institutional customer. This corporate account refers to an account specifically for SMEs, large corporations, and offshore business, which means this corporate banking department provides services specializing for business entities. Institutional customer is a term for a corporate customer which differentiate between retail customers and corporate customers (Proença & Castro, 2000).
The targeted customer for CBD was different from CnBD. CBD usually target various industries such as automotive, healthcare, food and beverage, energy servicing, mining, utility companies, etc. (Thunman, 1992). In the WB corporate banking department context, the researcher could use this literature as a guideline for setting up this department.

Bancassurance Department
Bancassurance department function as a bridge between an insurance company and the bank. This department aimed to offer an insurance product to the bank's customer. The insurance company will earn a commission from the bank staff's insurance, while the bank will earn fee-based income from this transaction. This partnership between banks and insurance company will be profitable for both parties (Bergendahl, 1995).
Bancassurance department distributes insurance product to the consumer by specialized wealth advisers which they were the bank staff. The life insurance product is usually a medium and long-term investment product. This product was designed specifically for the bancassurance department to meet consumer needs in terms of matching and simplicity with banking products (Paul, 2012).
By having the bancassurance department, banks will have the potential to be multi-insurance distributors which offer various type of products from different insurance companies. This will ease the bancassurance department to meet its customers' needs, thus strengthening the department's position and the banks. The business model of bancassurance will affect all aspects of the banks' activity including the banks' structure, product design, sale and marketing, etc. (Htay et al., 2015).
Bancassurance department function as an efficient distributor with potentially higher sales with a lower cost of operation. These advantages were well connected to the degree of combining the banking and insurance product. However, there was no such proof presenting the exact range of the connection between the two (Deol, 2009).
In WB studies, the researcher suggested the integration of the Islamic banking structure with the waqf institution structure. This bancassurance department has shown the researcher the integrated models between bank and insurance companies. The researcher can learn a few things from these integrated models to develop the WB structure, at least for WB Bancassurance department development.

Conclusion and Recommendation
This paper aimed to establish the WB operational structure model for Malaysia's economic growth. These have led this paper to study various knowledge fields to fulfil in the academic world. These fields include waqf, cash waqf, corporate cash waqf, corporate cash waqf structure, WB operational team, Islamic banking, WB structure, etc. In addition, Waqf can form a mechanisme of savings-investment system in which funds are diverted from consumption and invested in productive assets that generate income.
Further study in the areas of WB is indeed essential to endeavour. The establishment of WB will need additional post-study research for it to be successful. Other areas requiring further studies are the legal aspects of banking practice and cash waqf funds for Muslim economic development. Due to cash waqf's potential in developing WB Organization in Malaysia, the study of the WB act should be the number one priority.