Bayt al-mal

Bayt al-mal (بيت المال) is an Arabic term that is translated as "House of money" or "House of Wealth." Historically, it was a financial institution responsible for the administration of taxes in Islamic states, particularly in the early Islamic Caliphate. It served as a royal treasury for the caliphs and sultans, managing personal finances and government expenditures. Further, it administered distributions of zakat revenues for public works. Modern Islamic economists deem the institutional framework appropriate for contemporary Islamic societies.

History

Bayt al-mal was the department that dealt with the revenues and all other economical matters of the state. In the time of Muhammad there was no permanent Bait-ul-Mal or public treasury. Whatever revenues or other amounts were received were distributed immediately. There were no salaries to be paid, and there was no state expenditure. Hence the need for the treasury at public level was not felt. In the time of Abu Bakr as well there was no treasury. Abu Bakr earmarked a house where all money was kept on receipt. As all money was distributed immediately the treasury generally remained locked up. At the time of the death of Abu Bakr there was only one dirham in the public treasury.