Usmani fumes after being denied his cutMarch 29, 2012
One of the two most prominent sharia finance proponents in the world, Taqi “Ugly” Usmani, has rebuked financial institutions in North America and Australia for using his name to market sharia financial products without having paid for his endorsement.
Mr. Usmani is accustomed to being “hired” as a sharia board member by major Islamic banks throughout the world. Whenever he blesses off on the latest product that the sharia bankers have cooked up, Usmani gets a nice, fat check.
But this time, the sharia bankers failed to stroke his back and line his pockets. They apparently decided to use old Usmani quotations to help promote ijara loans, which gave the appearance of Usmani approving these specific financial products. Usmani released a written statement (h/t Creeping Sharia) last month warning legal action against the unnamed banks:
Announcement Regarding Misuse of a Fatwa
Thursday, 17 February 2011 12:32
This is for information of all concerned that I have been receiving correspondence from various places enquiring whether I have authorized any Ijarah contracts of certain financial institution in America, Australia and Canada. As evidence these companies have posted a 15 years old fatwa of mine on their websites. I would very explicitly like to declare the following in this regard:
I have never approved any Ijarah contract or scheme for any Financial Institution in America, Australia or Canada.
This fatwa was actually issued 15 years ago in peculiar circumstances prevalent at that time in favor of a house financing company, namely, Al-Amin Company based in Jeddah which they had intended to implement at that time but is no more acting in USA. This Fatwa cannot be used by any other company, because I never reviewed their contracts, nor do I serve on their Shriah Board . As such, the use of this fatwa by other financial institutions is illegal and misleading.
All such companies are requested not to refer to this Fatwa nor to use it as their marketing material, and immediately remove it from their websites failing which they may face legal action at their own cost.
But mind you, Usmani is not opposed to ijara loans. In fact, ijara is one of the more widely accepted methods among Muslims for structuring a loan. Usmani himself has specifically signed off on ijara loans before. Recently Usmani has become critical of murabaha, which is a different structural basis for Islamic financial products.
Once you understand that Usmani supports ijara, but has blasted the banks who invoked his name to help market ijara loans, then you understand more about the profit motive of the sharia advisors. He’s not mad that sharia banks in North America sell ijara loans. He’s just mad that they didn’t pay him for it.
Also, sharia advisors like to have access to a portion of the sharia bank’s profits to divert as corporate zakat toward “Islamic charity” or jihad. That helps the sharia advisors maintain their status and reputation with their sharia-oriented friends. And if the banks don’t pay, then Usmani can’t play.