How does a cash Waqf work?
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
When the underlying asset of Waqf is cash, any assets purchased with the cash will not automatically become Waqf upon purchase. Such procured assets can be sold for capital growth. In such a scenario, the original capital input will remain as the Waqf and the surplus will be the Waqf income which will be used as per the Waqf deeds. The amount of capital given at the time of Waqf will be the Waqf asset regardless of depreciation in its value over time. The profit and income can be used in Shari’ah-based lending as well as Shariah compliant investments where the profit share owned by the Waqf goes to beneficiaries. [AAOIFI Sharia Standards]
And Allah Alone Knows Best
Mufti Faraz Adam,
I Waqf Shariah Advisor