Zakāh Collection and Distribution Framework in Federal Territory of Kuala Lumpur: A Study on Selected Islamic Banking Institutions

Zakāh is one of the important Islamic financial instruments. It is a resource for economic development in Muslim society. The management of zakāh in Malaysia is normally placed under the State authority. Focusing on the Federal Territory of Kuala Lumpur (FTKL), this study seeks to analyse the zakāh collection and distribution framework from certain selected Islamic banking institutions. The collection of data is made based on the available reports from 2009 to 2013, as obtained from the Zakāh Collection Centre or PPZ that is established under the Islamic Religious Council of FTKL or also known as MAIWP. Based on the examinations done on the zakāh collection and distribution framework in the FTKL, it is found that the collection and distribution figures of zakāh continue to increase in subsequent years through the efforts made by the institutions. The observation indicates that the practices of zakat collection and distribution as carried out by the Association of Islamic banking institutions already comply with the principles of Sharīah. However, there are particular areas that require improvements from the Islamic banking institutions for achieving better performance in the zakāh collection and distribution. This is crucial for the economic enhancement of Muslims in Malaysia.