Journal of Islamic Economics, Banking and Finance, Vol-11, No. 4, Octo–Dec, 2015 100 Operation of Cash Waqf in Malaysia and its Limitations Farhanah Mohd Mokhtar 1 Emira Mad Sidin 2 Dzuljastri Abd. Razak 3 Abstract The practice of cash waqf has gained popularity in Malaysia partly because of theadvertisement made by Bank Muamalat Malaysia Berhad (BMMB), the frst Islamic banking institution to manage cash waqf together with PerbadananWakaf Selangor (PWS). Since the inception of the cash waqf scheme, thesupport given by customers to BMMB can be seen from theincrease in funds beingcollected. This paper discussesfactors that hinder the operation of cash waqf fund in Malaysiaparticularlyitscollection and usage. The paper, in its methodology,has adopted the interview of bankers from BMMB and staff of PWS. The fndings reveal several limitations in thedaily operationof cash waqf. Theissues includemulti-level decision-making process,andlack of trained personnel. The need to comply with demand of stakeholders and the underdevelopment ofsecondary projectare some of the other issues. The study recommends that the bank heeds lessons from these limitations as theymay undermine customers’ trust in the cash waqf scheme and their satisfaction towards the bank’s service. Keywords: Cash Waqf, Islamic banking, multi-level decision, investment, limitations 1. Introduction Malaysia is the most advanced country in the development of Islamic Banking and Finance. Since the establishment of Bank Islam Malaysia Berhad in 1983, the country has improved its legal structure, banking environment and innovation of Shari’ahcompliant fnancial products and instruments in both the banking sector and 1. IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia 2. IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia 3. Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia