The possibility of establishing an endowment (Waqf) from the Islamic financial institutions’ provisioned funds in the United Arab Emirates

Purpose - Islamic financial institutions (IFIs) can gather provisioned funds from various sources, but they are prohibited from incorporating these funds into their profits or using them for personal gain as they are considered illegitimate income. Instead, IFIs are required to allocate these funds to charitable purposes. This study aims to examine the potential establishment of aWaqf(an Islamic alternative for endowment) using the provisioned funds of IFIs in the United Arab Emirates (UAE) by analyzing itsShariahperspective, utility and viability. Design/methodology/approach - This research uses an information-gathering approach, gathering data from books, articles, journals and websites to illuminate theShariahperspective of endowing provisioned funds. Additionally, it draws upon interviews with experts inWaqfand Islamic banking and finance to grasp the potential and viability of establishing aWaqffrom provisioned funds in the UAE. Findings - Establishing aWaqfusing provisioned funds is permissible. AlthoughWaqfis always advantageous, in the current situation, endowing Islamic financial institutions' provisioned funds will not adequately address societal needs in the UAE. This is because the majority of annual returns on UAEWaqfinvestments are low compared to the amount invested, and there is an urgency to disburse these funds to those in need. If these needs are identified and met using Zakat and other charitable funds, aWaqfcan be created from provisioned funds and prove beneficial. However, the authors have suggested some proposals to establish a relevantWaqffrom provisioned funds that satisfy the required conditions and address the societal needs of the UAE. They concluded that creating aWaqfschool would be the best suggestion. Research limitations/implications - The scope of this study is limited to examining the use of IFIs' provisioned funds to establish aWaqfin the UAE. Furthermore, the findings and conclusions of this study may be applicable only to the UAE and may not be universally applicable to other countries. Practical implications - Proposed initiatives to create a “Cash Waqf” fund and a “Waqf School” using provisioned funds are anticipated to bring about immediate positive changes for the underprivileged and the wider UAE community. Furthermore, the sustainable establishment of anyWaqfcould greatly benefit society by addressing all societal needs through Zakat and charitable contributions. Originality/value - To the best of the authors’ knowledge, this is the first study to explore the potential and practicality of creating aWaqfusing provisioned funds from IFIs in the UAE.