Launch Partners

Tuesday, November 29, 2022

Launch Partners

Dubai’s National Bonds eyes partnership with Malaysian entities for Waqf products

The UAE’s National Bonds is exploring the possibility of partnering with Malaysian entities for cash Waqf-based products similar to its recently launched Sukuk Al Noor, Deputy CEO Rehab Lootah told ISFI. The partnership will be National Bonds’s first international Waqf initiative.

“At National Bonds, we strive to make a difference for the better by initiating projects and partnerships that can serve the community at large. In this very quest, we have identified partners that share our vision and are in the process of finalizing our partnership with them,” Rehab shared.

The fully Shariah compliant National Bonds, which was established under the Dubai government-owned umbrella of Dubai Investment Corporation, is looking to expand its cash Waqf product offering to the international market beyond the UAE to share its expertise on innovative Waqf solutions including timed and permanent Waqf products.

As National Bonds is an investment institution, it does not have the license to collect Waqf funds. It has partnered with Awqaf and Minors Affairs Authority (Dubai) and Noor Dubai for its Waqf initiatives so far. To develop Waqf-based products in Malaysia, it would need to partner with Malaysian Waqf authorities.

While National Bonds’s products are termed as ‘Sukuk’, they are actually savings account products or investment certificates rather than capital market products, as the name would suggest. The timed and permanent Waqf arrangement is such that it is at the investor/contributor’s discretion to decide how long the profits generated through the product will be channeled to the beneficiary charitable institutions.

Rehab highlighted the benefits of Waqf over charity, stating that an asset structured as a Waqf can generate and sustain multiple contributions to benefit charitable organizations while a charity is a one-time contribution.

In a permanent Waqf arrangement, the principal amount invested and the profits generated will be channeled toward the beneficiary institution. Alternatively, for timed Waqf, the profits will be channeled toward the charitable institution for a specified amount of time — one, three or five years — after which the contributor will redeem their principal contribution, Rehab explained.

Earlier in October this year, National Bonds launched the Sukuk Al Noor initiative in collaboration with Noor Dubai and the Mohammed Bin Rashid Global Center for Endowment Consultancy.

Sukuk Al Noor, with a goal to collect AED100 million (US$27.22 million) in three months from individuals and corporates, donates profits to people seeking treatment for eye diseases to help Noor Dubai cover its operational cost and sustain the charitable organization.

National Bonds has given preferred rates for the Sukuk Al Noor initiative as its way to contribute to the charitable cause as a corporate social responsibility.

National Bonds launched its first Waqf initiative, Sukuk Al Waqf, in April this year during the month of Ramadan. In contrast to Sukuk Al Noor, the first Waqf project did not specify the beneficiary charity/project. Contributors were able to select the specific Waqf project they want to contribute to.

With a goal to collect AED100 million, National Bonds contributed AED50 million (US$13.61 million) to the Sukuk Al Waqf initiative. National Bonds acted as the Mudarib for the initiative.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here