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Holy man joins jet set as Islamic finance booms
February 5, 2008 / 1:36 PM / in 10 years

Holy man joins jet set as Islamic finance booms

MANAMA (Reuters) - Studying 1,000 year-old Islamic manuscripts may not be a typical way for a jet-setting financial consultant to unwind, but in his Arab robes and chequered head dress, Sheikh Nizam Yaquby is no ordinary business expert.

<p>Nizam Yaquby, an Islamic Sharia scholar, speaks to journalists during the 2008 Reuters Islamic Banking &amp; Finance Summit in Manama, Bahrain February 4, 2008. REUTERS/Hamad I Mohammed (BAHRAIN)</p>

Yaquby is one of a select group of Islamic scholars overseeing Islamic finance, the banking industry’s fastest growing niche market. When not advising on multi-billion dollar deals he dispenses rulings on everyday issues such as divorce and family disputes.

Yaquby relinquished life as a full-time holy man and academic when he agreed to supervise an Islamic bank at the request of a friend in 1989, a decision that would turn him into a major financial powerbroker.

“I told him I don’t know what to do there. He said consider it a learning experience,” Yaquby said at the Reuters Islamic Finance Summit.

Between engagements in London, New York, Dubai and Bahrain, Yaquby will sit on the board of scholars next week that will decide the fate of the $80 billion Islamic bond industry, rocked by controversy over questions about compliance with Islamic law.

Demand for Islamic banking has surged as more of the world’s 1.3 billion Muslims seek investments that comply with their beliefs. The industry is on course to manage $1 trillion in assets by 2010 from almost nothing 30 years ago, according to consultants Mckinsey.

Yaquby sits on the Islamic law, or sharia, board of the most widely accepted standards body in the Islamic world, the Accounting and Auditing Organization for Islamic Financial Institutions.

He also sits on the sharia advisory boards of banks including the Islamic units of HSBC and BNP Paribas, and advises Dow Jones.

Such is the demand for his expertise and those of his few peers, some media reports have speculated that they command fees of $100,000 per fatwa, or religious edict, and earn annual incomes of more than $1 million a year.

Four bankers contacted by Reuters declined to say on the record how much they paid scholars, saying they feared it would hurt their business.

Yaquby declined to be drawn on fees, but said some scholars were paid retainers while others were paid per consultation. Fees varied wildly depending on the scholar and the length and complexity of the consultation, he said.

“There is no proof that they are millionaires, let alone that they are billionaires,” Yaquby said.

“If someone expects scholars should be a philanthropic society, that’s a mistake. They are professionals,” he said, adding that Islamic scholars working in finance are generally paid about the same as lawyers and financial consultants.

While his working life may resemble that of a financial dealmaker‘s, Yaquby’s leisure time is spent poring over 2,000 ancient religious manuscripts among his private collection of 50,000 volumes. At least one text was 1,000 years old, he said.

“If you are speaking about a competent scholar who has the respect of the general public ... you are speaking about an ethical person whose conduct is reflected in his rulings,” he said.

As well as his native Arabic, Yaquby speaks English, Farsi and Urdu, all languages he uses in his work. He started studying religious texts at the age of 10 and was teaching at 16.

“For anybody to be capable of giving sharia ruling on modern banking and finance, especially on a global scale, he must have a multi-disciplinary background,” said Yaquby, who holds a degree in economics and comparative religion.

“Although sharia is the cornerstone, a good knowledge of business, finance, economics and legal practices of different backgrounds, plus knowledge of modern languages are very important,” he added.

Reporting by Mohammed Abbas, editing by Will Waterman

Our Standards:The Thomson Reuters Trust Principles.
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