UUS Bank Jatim Launches Cash Waqf Linked Deposit (CWLD), First of Its Kind Among All UUS and Islamic Commercial Banks BPD in Indonesia
Date: 21 august 2024Categories :
SURABAYA, August 21, 2024 – The Sharia Business Unit (UUS) of bankjatim continues to demonstrate its commitment to supporting the development of the Islamic economy in Indonesia, particularly in East Java. This commitment was proven with the successful launch of the Cash Waqf Linked Deposit (CWLD) on Wednesday (August 21). With this launch, UUS bankjatim became the first to introduce CWLD among all UUS and Islamic Commercial Banks BPD in Indonesia.
The event, held at the Morazen Hotel Ballroom in Surabaya, was attended by the President Director of bankjatim, Busrul Iman, the Compliance Director of bankjatim, Umi Rodiyah, Executive Analyst of the Directorate of Sharia Banking Regulation and Development at OJK, Gunawan Setiyo Utomo, the Sharia Supervisory Board (DPS) Chairman of bankjatim, Kh. Afifuddin Muhajir, and DPS member of bankjatim, Sukadiono.
Busrul explained that the CWLD program, which was launched as the first of its kind across all UUS and Islamic Commercial Banks BPD in Indonesia, is a significant step to strengthen the role of Islamic banking in developing waqf instruments that can bring widespread benefits. “In collaboration with Nadzir (waqf asset managers) from the Indonesian Waqf Movement Foundation and Rumah Waqf Indonesia, UUS bankjatim presents a solution that not only provides financial benefits to the waqif (donors), but also brings significant social impact to the community,” he explained.
The collaboration with these two Nadzir focuses on the distribution of waqf funds for two main purposes. First, CWLD Series 1 will be allocated for scholarships for students in the Merdeka Belajar Kampus Merdeka (MBKM) program in collaboration with the Indonesian Waqf Movement Foundation. The collected waqf funds will be used to support student education through scholarship programs. “This is UUS bankjatim's real contribution to improving the quality of human resources, which is a crucial pillar for the future of the nation,” he emphasized.
Second, CWLD Series 1 will be used for capital assistance for micro, small, and medium enterprises (MSMEs) in collaboration with Rumah Waqf Indonesia. This collaboration will focus on business development for MSMEs in East Java to help empower them.
The CWLD itself is a temporary cash waqf product designed to integrate the social and commercial functions of an Islamic bank as one of the Waqf Money Financial Institutions (LKS-PWU). The mechanism of this product is similar to conventional deposit instruments. The waqif (donor) will deposit cash waqf into the bank in the form of a deposit.
The bank will then manage the deposit in accordance with the deposit term and agreement. As with other deposit products, the cash waqf will be returned to the waqif upon maturity. What sets CWLD apart from regular deposits is that the profit-sharing of the deposit will be distributed to the beneficiaries of the waqf (mauquf alaih) through Nadzir, who is a partner of the Islamic bank LKS-PWU. This means the waqif does not receive deposit profit-sharing but instead earns rewards from the waqf that has been channeled.
Meanwhile, Gunawan Setiyo Utomo emphasized that the LKS-PWU, as the manager of CWLD, is fully responsible for managing the waqf funds. The LKS-PWU must ensure that the funds are placed safely in accordance with Islamic principles and are supervised by OJK. “It is important to note that the potential of cash waqf in Indonesia is enormous, reaching Rp 180 trillion. However, the realization is still very small, around 1 percent as of 2023. This is something we must maximize to achieve the welfare of the community,” he emphasized.
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