BAITULMAL S POTENTIAL AS TRUSTEE FOR UNCLAIMED MONEYS OF MUSLIMS

International Journal of Civil Engineering and Technology (IJCIET) Volume 8, Issue 12, December 2017, pp. 593 599, Article ID: IJCIET_08_12_065 Available online at http://http://www.iaeme.com/ijciet/issues.asp?jtype=ijciet&vtype=8&itype=12 ISSN Print: 0976-6308 and ISSN Online: 0976-6316 IAEME Publication Scopus Indexed BAITULMAL S POTENTIAL AS TRUSTEE FOR UNCLAIMED MONEYS OF MUSLIMS Md Yazid Ahmad (Corresponding Author) Nurul Husna Mohamed Ezad Azraai Jamsari Department of Arabic Studies and Islamic Civilization, Faculty of Islamic Studies, Zamzuri Zakaria Anwar Fakhri Omar Mohd Syakir Mohd Taib Department of Arabic Studies and Islamic Civilization, Faculty of Islamic Studies, ABSTRACT Baitulmal s potential as a public trustee for unclaimed monies of Muslims in Malaysia is bright, only if parties responsible cooperate to realize it even though this matter is still being debated today. Legally, the Shariah s position on unclaimed monies and properties of Muslims, is that these form part of the resources for Baitulmal. However, the provisions of the Unclaimed Moneys Act 1965 prevail over the jurisdiction of Baitulmal to manage this matter in Malaysia. Thus, beginning from this point, this article highlights Baitulmal s potential to be the trustee for unclaimed monies of Muslims in Malaysia and gives suggestions to make this a reality. This research uses a qualitative approach through historical study and content analysis. Research results argue that Baitulmal should rightfully be placed in a high position within the country s administrative system, but in Malaysia its role is limited and subject to the State Islamic Religious Council. Hence, exploring the potential of Baitulmal in managing unclaimed moneys of Muslims in Malaysia needs to be http://www.iaeme.com/ijciet/index.asp 593 editor@iaeme.com

Md Yazid Ahmad*, Nurul Husna Mohamed, Ezad Azraai Jamsari, Zamzuri Zakaria, Anwar Fakhri Omar, Mohd Syakir Mohd Taib comprehensively conducted to empower the role of Baitulmal to maintain and sustain the welfare of the whole Muslim community in Malaysia. Key words: Potential; baitulmal; trustee; unclaimed moneys; Unclaimed Moneys Act 1965. Cite this Article: Md Yazid Ahmad*, Nurul Husna Mohamed, Ezad Azraai Jamsari, Zamzuri Zakaria, Anwar Fakhri Omar, Mohd Syakir Mohd Taib, Baitulmal s Potential as Trustee for Unclaimed Moneys of Muslims. International Journal of Civil Engineering and Technology, 8(12), 2017, pp. 483-491. http://www.iaeme.com/ijciet/issues.asp?jtype=ijciet&vtype=8&itype=12 1. INTRODUCTION Wealth is a trust from Allah SWT which may be used as a means to fulfill obligations and perform charity through ways recommended by Shariah for the well-being of mankind (Ahmad & Laluddin 2010). In Malaysia, there are many financial institutions such as commercial banks, takaful and insurance companies as well as cooperatives to keep moneys in accounts. In a situation where an account-holder has not activated his account for more than seven years, the money is surrendered to the Registrar of Unclaimed Moneys. This is by virtue of provisions in the Unclaimed Moneys Act 1965 which states that any company registered with the Companies Act 1965 or any firm, holding any inactive savings account, or moneys of unknown owners, or moneys the owners of which are difficult to trace for seven years, must lodge the said moneys to the Registrar of Unclaimed Moneys. In addition, section 8 of the Unclaimed Moneys Act 1965 states that unclaimed moneys are made up of sums which are legally payable to the owners but have remained unpaid for at least one (1) year after they became payable, moneys credited to accounts which have not been operated by the owners in any manner for at least seven (7) years, e.g. savings account, current account and fixed deposits (with automatic renewal instruction), and moneys credited to trade accounts which have been dormant for at least two (2) years. The said provisons covering the inheritance estate of deceased owners, estates without legal heirs and so on should be under the responsibility and supervision of the Baitulmal (Ahmad, Laluddin, Ahmad 2017; Ahmad et. al. 2017). Hence, unclaimed moneys involve individuals and nominees who did not make any claims, whether they are still living or deceased (Ahmad & Ibrahim 2002; Ahmad et. al 2012). 2. CONCEPT AND ROLE OF BAITULMAL Possession over wealth is more of a responsibility and not an absolute ownership, that is, responsibility to manage and utilize it for the benefit of society and religion (Ahmad & Ibrahim 2006). Thus, parties entrusted to manage Baitulmal wealth have a heavy responsibility to ensure that the achievement of targeted objectives conform to legal and shariah requirements. Baitulmal in modern terminology is known as the National Treasury (Tahir 2007). Al- Mawardi (1983) explained that Baitulmal is a place to record the collection and re-distribution of wealth. More precisely, Baitulmal as a national treasury which collectively receives, manages and coordinates various sources of money and assets such as waqf, property, zakat, khairat, taxes etc. (Tayib & Osman 2009; Wan Hassan 2017). Nik Hassan (2003), supported http://www.iaeme.com/ijciet/index.asp 594 editor@iaeme.com

Baitulmal s Potential as Trustee for Unclaimed Moneys of Muslims by Osman (2009), stated that, Baitulmal practices the concept of trusteeship in public financial management. This concept means that moneys and assets channelled to the Baitulmal, form a trust wealth of Allah SWT and collectively owned by Muslims (Laluddin et. al. 2012). The Islamic state government in turn acts as public trustee with responsibility to Islam. In line with this view, Kamaruddin (2008) asserted that the Baitulmal should be seen as a financial institution and treasury with the role of generating economic strength and equilibrium so that the Muslim community may collectively and optimally benefit from its actual wealth. More than that, Tahir (2009) held the opinion that the scope of Baitulmal s role is not only in the country s financial system but also as a central bank for the financial system. However in Malaysian context, the affair of the Baitulmal is under the management State Islamic Religion Council (MAIN) as embodied in provisions of Federal Constitution (Ahmad & Ibrahim 2008). Consequently, the administration and coordination of Baitulmal is narrowed in scope and functions by a split in administration between the country s treasury through the Ministry of Finance of Malaysia and the Baitulmal through the State Islamic Religious Councils (MAIN). In this regard, Yusof (2009) emphasized on strengthening the Baitulmal administration through a system of good governance so that the Muslim community may have increased confidence in the Baitulmal institution, indirectly contributing to increased zakah collection and hibah as well as waqf. In the context of astrofiqh research, it is also required appropriate and good governance as well (Safiai et. al. 2016; Safiai et. al. 2017). Therefore, in order to increase sources of revenue for Baitulmal, the State Islamic religious councils has allowed it to be directly involved in commercial projects as the Baitulmal s role also includes all state development activities. Until now, Baitulmal in Malaysia has contributed significantly towards the welfare of the Muslims. 3. DILEMMA OF CONFLICT BETWEEN UNCLAIMED MONEYS ACT 1965 AND FATWA The affair of the baitulmal is under the management State Islamic Religion Council (MAIN) as embodied in provisions of Federal Constitution. Most financial agencies and institutions are subject to the Unclaimed Moneys Act 1965. However, Section 18 of the Act also gives the power to the Minister of Finance to grant exemptions to a firm or company from the provisions of the Act. The Shariah Court, Civil High Court, Tabung Haji (Pilgrim Fund) and Amanah Raya Berhad (Public Trustee Limited) are among agencies or financial institutions not subject to this Act. The Shariah position in Malaysia is that unclaimed moneys and properties of Muslims are part of Baitulmal s resources (Shahid 2012). Generally, Shahids (2012) opinion is that matters involving unclaimed moneys of Muslims need to be taken seriously by the government and State Islamic Religious Councils. This conflict becomes an ongoing dilemma for Muslims in Malaysia. On the 10 th of April 2012, in a 2/ 2012 Meeting of the Fatwa Committee of Selangor State was convened and decided that unclaimed moneys and properties of Muslims in Selangor in any financial institution, company and firm must be surrendered to the Baitulmal of the Selangor State Islamic Council. This Fatwa was consented to by the DYMM Sultan of Selangor on the 7 th of June 2013 and gazetted on the 7 th of October 2013. In the 99 th Muzakarah (Conference) of the National Fatwa Committee for Islamic Religious Affairs of Malaysia which convened from 4-6 May 2012, a working paper on http://www.iaeme.com/ijciet/index.asp 595 editor@iaeme.com

Md Yazid Ahmad*, Nurul Husna Mohamed, Ezad Azraai Jamsari, Zamzuri Zakaria, Anwar Fakhri Omar, Mohd Syakir Mohd Taib Management of Unclaimed Moneys and Properties of Muslims was presented and discussed. It was decided that such monies and properties must be deposited with the Baitulmal as one of its sources in the category of ghayr dawriyyah (non-routine or incidental) wealth. Further, the Muzakarah also decided that a provision be legislated in the provincial State Shariah Enactment, to enable acceptance by the State Baitulmal of such unclaimed monies and properties from any Islamic financial institution in the State. Hence, some follow-up actions were implemented by the Department of Awqaf, Zakah and Hajj (JAWHAR). In November 2012, JAWHAR sent letters on the decision by the Muzakarah National Fatwa Committee to all State Islamic Religious Councils (MAIN) and banking institutions in Malaysia so that the fatwa recommendations be examined and appropriate actions be taken in the interest (maslahah) of the Muslim public (Shahid 2012). The Administration Of The Religion Of Islam (Perak) Enactment 2004, in its 2012 amendment (Enactment A30 2012), inserted return of unclaimed monies and properties of Muslims as one of the general resources of Baitulmal. Even though the Administration of Islamic Religion Enactment of the other states does not state clearly that the provision of unclaimed money is under the jurisdiction of Baitulmal, it nevertheless may be nderstood based on the provisions related to the responsibility and rights of Baitulmal in those enactments. With regard to Tabung Haji (Pilgrims Fund), formerly known as LUTH, on the 3rd of October 1990, the 27 th Muzakarah of the National Fatwa Committee decided that the Shariah position in the issue of depositors dormant accounts, is that LUTH may not surrender moneys in such inactive depositors accounts to the Registrar of Unclaimed Moneys. This fatwa is based on the contract of agreement between the depositor and LUTH which places this institution as a trustee to carry out transactions with the depositors savings. The depositor s right to his savings continues and remains intact even though the account has been inactive for more than seven years. In the year 1993, upon application made by LUTH, the Minister of Finance granted to LUTH an exemption from being subject to the Unclaimed Moneys Act 1965. However, the approval for exemption is subject to an amendment in the Act to enable LUTH to administer by itself unclaimed moneys in savings accounts and ensure that such sums may be claimed by the depositors at any time. This exemption applies only to unclaimed moneys in savings accounts (Shahid 2012). Thus, in order to realize the application for exemption as recommended by the Minister of Finance, the Tabung Haji Act 1995 (Act 535) was legislated to replace the LUTH or Lembaga Urusan dan Tabung Haji Act 1969. 4. PROSPECT FOR BAITULMAL AS TRUSTEE OF UNCLAIMED MONEYS Basically, Article 97(3) of the Federal Constitution provides that any Zakat, Fitrah, Baitulmal, or similar Islamic religious revenue is raised, it shall be paid into a separate fund and shall not be paid out except under the authority of State law or Federal law. Hence, the Baitulmal should play a more proactive role in generating economic development for Muslims so as to be more progressive. Among the new resources of high potential which may be placed within Baitulmal s responsibility is as trustee for unclaimed moneys of Muslims, in financial agencies and institutions in the respective states of Malaysia, even though dominated by the Registrar through the Unclaimed Moneys Act 1965. As reported in Malaysian Gazette on 1 st January 2017, RM5.6 billion with a breakdown of sums as little as two cents to tens of thousands ringgit are still unclaimed by their owners. http://www.iaeme.com/ijciet/index.asp 596 editor@iaeme.com

Baitulmal s Potential as Trustee for Unclaimed Moneys of Muslims This total amount includes savings in inactive accounts, unwithdrawn fixed deposits, interest, insurance compensation, as well as deposits for electricity and water. According to studies by Mahamood (2009) and supported by Shahid (2012), unclaimed moneys also include wealth or money without heirs if the owners die without leaving legal heirs, and leaving heirs but the heirs are unaware of the moneys, and where the owners or their heirs are difficult to trace. The existence of unclaimed wealth in various entities has given a big impact on the economic development of the country. The wealth should have been multiplied and not left idle and unmanaged until frozen. Freezing of wealth is against the spirit of maqasid shariah (Purpose of Shariah) which recommends it be administered in the best interest of the Muslim community (Ahmad et. al., 2014; Laluddin et. al., 2012). According to Islamic law, unclaimed moneys is one of the resources within the rights of the Baitulmal in the category of ghayr dawriyyah (non-routine or incidental wealth). This is because Baitulmal s right is not restricted to only wealth without heirs, or surplus wealth unconsumed by heirs and luqatah (lost and found) property, but also extends to property at risk of loss and unknown ownership such as al-ghusub (booty), al-awari (on loan) and alwada i (savings or stored property) whose ownership is difficult to trace (Rayyan 1999). Hence, even though unclaimed moneys of Muslims may still in practice be deposited with the Registrar by virtue of the Unclaimed Moneys Act 1965, (Act 370), legally, it must be surrendered to the Baitulmal as a general source within the scope of Mal section (Mahamood 2008). Based on the above explanation, it is clear that the Baitulmal has a great potential to become the trustee for unclaimed moneys for Muslims in Malaysia. 5. CONCLUSIONS Baitulmal should rightfully be placed in a high position within the country s administrative system, but in Malaysia its role is limited and subject to the provincial State Islamic Religious Council. Legally, unclaimed moneys of Muslims are managed by the Registrar of Unclaimed Moneys. On the contrary, according to Shariah and provincial State Islamic Administration Enactments, such moneys are under the jurisdiction of the Baitulmal with full rights over the wealth of Muslims in this country. Nevertheless, based on studies conducted, the Baitulmal clearly has a great potential as the public trustee for unclaimed moneys of Muslims in Malaysia. There are efforts by various parties such as the Department of Awqf, Zakah and Hajj (JAWHAR) and the Selangor Islamic Religious Council (MAIS) to reinstate Baitulmal as the rightful trustee instead of the Registrar of Unclaimed Moneys. But to date, however, there is no follow-up action for appropriate amendment to the Unclaimed Moneys Act 1965. Hence, exploring the potential of Baitulmal in managing unclaimed moneys of Muslims in Malaysia needs to be comprehensively conducted to empower the role of Baitulmal to maintain and sustain the welfare of the whole Muslim community in Malaysia. ACKNOWLEDGEMENT This study is funded by the Fundamental Research Grant Scheme (FRGS/1/2013/SSI03/1), Ministry of Higher Education Malaysia, the Research Group of the Nasrid Studies (GUP- 2015-011), UKM; the Research Group of Arabic Culture and Islamic Civilization (KUKAPI, DPP-2015-067) UKM; and the Research Group of West Asian Studies (AKRAB, DPP-2015-085). http://www.iaeme.com/ijciet/index.asp 597 editor@iaeme.com

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