DESIGN OF WAQF BANK ESTABLISHMENT IN INDONESIA: GROUNDED THEORY APPROACH

Indonesia, as the largest Muslim-majority nation, possesses significant potential for waqf to contribute to economic growth and enhance the welfare of its population; however, its development remains suboptimal. The importance of this study is to design the establishment of waqf banks that can be applied in Indonesia and fill the literature gap. The study employs a qualitative methodology grounded in theory, utilizing data triangulation to analyse in-depth interviews, with a focus on design thinking techniques. Theoretically, waqf banks can be established in Indonesia by considering the design of structure, ownership, capital, transactions, security, margin, and legality. The design thinking of waqf banks can be integrated within a domestic or national banking framework, characterized by cooperative ownership. Capital is sourced from the company, with transactions conducted through mudharabah. Government guarantees provide security, and profit margins may exceed 3%. Furthermore, waqf banks are recognized as legal entities within the Islamic banking system. The implementation of a more adaptive and reliable waqf bank design in Indonesia enhances the performance and benefits of waqf on a broader scale. Additional research is required to perform a quantitative analysis involving the waqf nazir of waqf collection institutions to promote the establishment of waqf banks in Indonesia.