This study aims to examine the business model, legal and regulation, risk management and supervision for Islamic banks to act as nazhir within the contemporary Islamic social finance ecosystem to come up with a proposal for a bank-based waqf business model. The business model proposal is supported by appropriate regulatory, governance and operational frameworks that can be applied at the international level.
This study adopts a qualitative research design based on in-depth interviews with nine key informants from various countries, comprising regulators, central bankers, subject-matter experts and a representative from an international standard setting body.
The findings reveal strong institutional support for positioning Islamic banks as nazhir, with cash waqf emerging as the most viable instrument due to its liquidity, operational flexibility and alignment with banking risk management framework. The study underscores the need for integrated bank-based waqf business models supported by clear operational structures, sound investment policies and strong governance and risk management.
This study pioneers the conceptualization of Islamic banks extended institutional role as nazhir through the integration of cash waqf mechanisms, positioning them beyond their traditional financial intermediation function. It contributes to Islamic social finance literature by establishing Islamic banks as strategic institutional actors in modern waqf management.
