Market-friendly rulings promote Islamic finance.
In a plain electronics store in Manama's old business district, one of Islamic finance's most powerful figures explains how religion defines the $1 trillion industry while still allowing for innovation.
"Everything is permissible unless you prove that it is not permissible," Sharia adviser Sheikh sheikh
Among Arabic-speaking tribes, especially Bedouin, the male head of the family, as well as of each successively larger social unit making up the tribal structure. The sheikh is generally assisted by an informal tribal council of male elders. Nizam Yaquby told Reuters in his tiny office crammed cram
v. crammed, cram·ming, crams
1. To force, press, or squeeze into an insufficient space; stuff.
2. To fill too tightly.
a. To gorge with food. with religious manuscripts and old texts. "In these spheres of life we have lots of freedoms, freedoms of choice and contracts. In most cases, there are permissible ways to do most of these deals. The Shariah is very flexible."
The industry's top scholar, Yaquby typifies the market-driven approach that has transformed Islamic banking Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles and guided by Islamic economics. from a tiny sector monopolized by pious Muslims into a global business.
The Bahraini religious teacher sits on 46 Sharia boards, the highest number among scholars who issue edicts on Islamic financial instruments and practices, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
Shariah advisers control the levers of the Islamic banking industry, applying religious law to decide which financial practices and contracts are permissible under Islam.
Why is Yaquby so popular? Practitioners paint the picture of a man who gets deals moving and is able to think in dollars and cents--rare traits among his peers, many of whom are religious academics who rigorously apply the letter of the law.
"He is business-savvy and commercially acute," Ayman Khaleq, a Dubai-based partner with lawyers Vinson & Elkins.
"He's one of very few Shariah scholars who try to figure out the economics of the deal before venturing into a Shariah analysis. He's a pragmatist prag·ma·tism
1. Philosophy A movement consisting of varying but associated theories, originally developed by Charles S. Peirce and William James and distinguished by the doctrine that the meaning of an idea or a proposition lies in in the sense that he's willing to spend time and effort to understand and appreciate what your product is like. He's not going to hit you with 'No way this would work' two minutes after you start talking."
Bankers say Yaquby's approach contrasts sharply to that of scholars such as Sheikh Muhammad Taqi Usmani Justice (Retired) Allama Mufti Muhammad Taqi Uthmani (Usmani) (Urdu: محمد تقی عثمانی) is a renowned Hanafi Islamic scholar from Pakistan who has served as a judge on the , whose shock ruling in 2007 that 85 percent of Islamic bonds fell foul of religious law contributed to a slump in issuance.
Yaquby, who advises BNP Paribas BNP Paribas (Euronext: BNP, TYO: 8665 ) is one of the main banks in Europe and France. It was created on 23 May 2000 through the merger of Banque Nationale de Paris (BNP) and Paribas. and HSBC HSBC Hongkong and Shanghai Banking Corporation
HSBC Humane Society of Broward County (Florida)
HSBC Humane Society of Bay County (Bay County, Michigan) , has backed the use of the waad (promise) in Islamic derivatives subject to conditions, said Geert Bossuyt, who worked with Yaquby while Bossuyt was head of Deutsche Bank Deutsche Bank AG (IPA: /'dɔɪ.tʃə/) (ISIN: DE0005140008, NYSE: DB) (English: German Bank Islamic finance.
Some scholars say derivatives can be a gambling tool.
Yaquby, who is usually in Arabic robes robe
1. A long loose flowing outer garment, especially:
a. An official garment worn on formal occasions to show office or rank, as by a judge or high church official.
b. An academic gown.
c. accompanied by tasbih (prayer beads), also defends the use of the organized tawarruq structure, which has been likened to interest-based lending.
"The choice is simple," said Shariah scholar Sheikh Yusuf Talal DeLorenzo. "You go to the guys whose hands have signed off on millions, if not billions, worth of transactions because they are the ones who have proved themselves over and over again."
Market-friendly rulings such as Yaquby's help thrust the industry further into the mainstream but could also lead to commercial expediency ex·pe·di·en·cy
n. pl. ex·pe·di·en·cies
1. Appropriateness to the purpose at hand; fitness.
2. Adherence to self-serving means: taking precedence over Islamic principles.
"The risk is there," said Bossuyt. "But if the guidance Shariah scholars give goes in the direction of 'I want the most pure market', then I'm convinced that there will be no market."
Since Yaquby and other top scholars sit on numerous boards, there are also worries about possible conflicts of interest.
"Any profession is like this--for example auditors, lawyers, consultants--they all face multiple clients and they sign confidentiality non-disclosure, and we do the same, we are required to have the highest ethical standards in these matters, no more or less than these institutions," Yaquby said.
Unlike scholars who have set up offices, Yaquby still works out of his family's electronics store, which hawks everything from $12 penknives to thousand-dollar watches.
The Canada and Saudi Arabia-educated Yaquby, who is fluent in English, delivers about 70 university lectures each year.
"My concern is the teaching, the continuation of Islamic knowledge," he said, producing a copy of Wilhelm Ahlwardt's catalogue of Arabic literature Arabic literature, literary works written in the Arabic language. The great body of Arabic literature includes works by Arabic speaking Turks, Persians, Syrians, Egyptians, Indians, Jews, and other Africans and Asians, as well as the Arabs themselves. published in 1887.
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|Publication:||Al Arabiya (Saudi Arabia)|
|Date:||Aug 26, 2009|
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