Integration and Development of Zakat Collection and Distribution in the Islamic Finance Industry

Integration and Development of Zakat Collection and Distribution in the Islamic Finance Industry

Abdulraham bin Abdullah Alsaadi (University of Bahrain, Bahrain)
Copyright: © 2021 |Pages: 10
DOI: 10.4018/978-1-7998-3452-6.ch014

Abstract

Zakat possesses a high-ranking position in Islam due to several reasons. First, it is an economic and financial system that provides a permanent financial resource for the public treasury. Second, zakat is a social system that fulfills the needs of poor people who represent the majority of the population in most countries and strengthens Muslim nations. In addition, it is an important means of cooperation and mercy among people. Third, zakat is considered a political system where the state through its officers is responsible to collect and distribute zakat in a fair manner. The prophet (peace and blessing of Allah be upon him) paid high attention to zakat. He used to send workers to collect zakat and he personally supervised the process of distribution. Likewise, his Rightly Guided Caliphs used the best approaches to collect and distribute zakat. In the light of contemporary developments in all aspects of life, particularly the financial aspect, it is not effective to use ancient approaches of collecting and distributing zakat. It is not appropriate nowadays to send ṣāʿī (zakat officers) to collect zakat in the way it was practiced centuries ago or open the door for individuals to collect and distribute zakat by themselves. Currently, there are various ways and means to collect and distribute zakat through governmental entities or through family funds that exist in some countries. The present study seeks to provide a new and important approach to collect and distribute zakat within the contemporary Islamic finance industry based on Shari'ah policy and public interest. Furthermore, the study highlights the social responsibilities of Islamic banks and emphasizes that the role of Islamic banks should not only constrain to finance and investment, but also to strive to achieve Shari'ah objectives through applying the wide concept of Islamic rules and values. The most notable role that Islamic banks could assume toward the community is to take care of collecting and distributing zakat in collaboration with governmental entities. The current study expects to come up with a framework for zakat collection and distribution system in the Islamic finance industry.
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Introduction

All praises due to Allah. Prayers and peace be upon the prophet, Muhammad, his family and all of his companions. In the beginning, I would like to thank the brothers in ISRA for granting me the trust to write a paper on an indispensable topic regarding “integration and development of collecting and distributing of zakat in the Islamic finance industry”.

There are many approaches and means to collect and distribute zakat. Among these means are collecting and distributing zakat by government institutions or by family funds that exist in some countries. However, discussing the role of government institutions and family funds is beyond the scope of the study because such a role is not directly related to the Islamic finance industry. The research is organized as follows. Section one discusses the concept of integration in terms of zakat itself and means of collecting and distributing it. Section two explains the role of Islamic banks in collecting and distributing zakat. Section three explores the obstacles and challenges that face Islamic banks in collecting and distributing zakat. The conclusion is the last section which contains the recommendations. May the Almighty Allah make this research useful.

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