BAITUL-MAL

INSTITUTIONS

NAJLAA BINTI FARID AZMI

SIM WEE HWA
SYEED MOHD SOLIHIN

WHAT IS BAITUL-MAL?
Bayt ul Mal, is an arabic term, that is translated as House of Wealth
It used to be a financial institution responsible for administration of
taxes in Islamic states, particularly in the early Islamic Caliphate
First established during the reign of Abu Bakr who succeeded the
Prophet in the year 632, A.D. as First caliph of the Islamic state
During Umar Al-Farooq ruling, the second caliph, the institution of BaitulMal turned into powerful and very important department of the state

ESTABLISHMENT OF BAITULMAL

Caliph Umar decided to establish the Central Treasury at Madinah

Previously, army were not paid, but after the establishment of Central Treasure, army
started to receive salary.
Pension and welfare concepts were introduced as part of zakat
Reserves of food were also kept for natural disasters and famine
No money was allowed to be wasted on luxuries that were unnecessary so that the
money can be used for the welfare of the people
The concepts of public ownership and public trusteeship were also introduced

SOURCES AND CLASSIFICATION OF

REVENUE
(i)The Zakat and Shadaqah revenues
(ii) The Ghanimah revenue or spoils of war
(iii) TheFai revenues such as Jizyah and
Kharaj

THE ROLES OF BAITUL-MAL

1)Enhancement of Income Sources
2)Charitable Donation
3)Islamic Microfinance
4)Sukuk Investment
5)Social Security

) Enhancement of Income Sources

To enrich the Baitul-Mal income sources especially charity sources through
new interpretation of Zakah sources such as gold, silvers, crops, business
result and the result of mining
Re-exploring the opportunities and resources for developing new strategic
fund development potential
Identify the outcome of activities do not comply with Shariah finance
industry which can be a sources to the existence of money
laundering/money syubhah from the banking sector, capital markets and
Takaful/insurance
Establish procedures in claiming and payment of unclaimed money,
disposal and the inquiry of its existence and modify legislation of
management

2) Charitable Donation

Donation is taken from the surplus

It is also commendable to gift present to close relatives and
friends
Gifts can also be given to orphans, travelers and others who are
in need.

3) Islamic
Microfinance
Qardhul Hasan financing. Qardhul Hasan (Benevolent loan) is a
condition for the loan agreements between borrowers and
creditors.
However, the concept of interest is not applicable in Islam
Ar Rahn. The purpose of this scheme is to extend the loan or to
get money fast and easy way to make the asset as collateral

4) SUKUK INVESTMENT
Invest excess of funds in these financial instruments
This can be done by the whole surplus Baitul-Mal funds in the country
combined to become large sum of funds to purchase the Sukuk
Profit through this investment can be channeled back to the group of
funds to be distributed to the Zakat recipient
There are two basic Sukuk structures: i) asset backed securities (ABS)
which is Sukuk formed based on assets. ii) assets Based Securities ,
Sukuk based on this form can be formed with its indebtedness and
sharing

5) SOCIAL SECURITY

Expenditures on development process, particularly in

protecting the welfare of the most disadvantaged and
vulnerable groups
Social security based on public properties may be
provided through several main techniques: social
insurance, social assistance, income security,

IMPORTANCE OF
BAITULMAL

1)Eradicating poverty
2)Provides basic needs
3)Raising the bar in Islamic Society
4)Pay Monthly Salary Government Officials
and Military Faction
5)Maintaining wealth dedicated

1) Eradicating
poverty
Distribution of alms to those who are
entitled to
Reduce social gap
Help solving he problems faced by the
needy

2) Provides basic needs

Provide basic facilities such as roads,
investment, social activities, etc.
Being socially responsible government
Welfare of muslims

3) Raising the bar in Islamic

Society
Improve education
Issuing scholarships / financial aid for
the needy

4) Pay Monthly Salary Government Officials

and Military Faction
Prohibit the possession of the spoils of war
No-man's land entrusted to run
Fixed salary is paid from state revenue

5) Maintaining wealth dedicated (Waqf)

The role of keeping the possessions of
country
Being a trustee if there is no waris

BARRIERS OF RUNNING BAITULMAL

IN MALAYSIA
1) Lack of leadership
) Amil must be among the religious, and strong responsibility in
doing whats right
) Without proper leadership, corruption and mismanagement of
wealth are bound to happen.
2) Diversity of race and religion
) Bad impression of the non muslims toward the Islamic institution
) Difficulty in reaching out to muslims, without offending other
religion

CONCLUSION

: .

As part of the advice of Imam al-Baqir (peace be upon him) to Jabir al-Jufiy:
Zakat increases sustenance.
Bihar al-Anwar, Volume 93, Page 14
http://www.al-islam.org/forty-ahadith-on-zakat/ahadith-traditions