Scholar answers

Yusuf Talal DeLorenzo, currently lives in the U.S.A, and has been in the Islamic Banking and Finance scene for a long time.

Presently he is Chief Shariah Officer and Board Member at Shariah Capital.

Shaykh Yusuf is a well-known and respected Shariah advisor and Islamic scholar whose career spans more than 30 years. Based in the Washington, DC area, he serves as a Shariah advisor to over 20 global financial entities, including index providers, banks, mutual funds, real estate funds, leasing funds, institutional investors, home finance providers, alternative asset managers and others.

Shaykh Yusuf is the author of “A Compendium of Legal Opinions on the Operations of Islamic Banks”, the first English reference on the fatawa issued by Shariah boards. His three-volume publication has become the standard reference for Islamic financial institutions. In addition, Shaykh Yusuf wrote the introduction to “Islamic Bonds”, the 2003 book that introduced Sukuk and transformed the world’s Islamic capital markets. His written work has appeared in journals and newsletters and as chapters in books, including Euromoney’s “Islamic Asset Management”, “Islamic Retail Finance and Islamic Finance: Innovation & Growth”. His entries on the terminology of Islamic Finance appear in The Oxford Dictionary of Islam.

Shaykh Yusuf is also a special consultant, appointed by the Asian Development Bank and the Islamic Development Bank in Jeddah to the International Financial Services Board (“IFSB”) on the subject of Sukuk. IFSB is the international standard-setting body of regulatory and supervisory agencies that have a vested interest in ensuring the soundness and stability of the Islamic financial services industry, broadly defined to include banking, capital markets and insurance.

Shaykh Yusuf has served as a judge in Islamic product reviews and has been a keynote speaker at numerous Islamic conferences. He has been interviewed by and quoted in the Financial Times, The New York Times, Fortune, The Wall Street Journal, Banker Middle East, Islamic Business & Finance and other publications.

Past assignments include

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: Is there any restriction in the extent of profits we can take from our customers in halal business transactions in order not to violate Islamic law? I heard it must be less than 30%, is it true? what is the reason?

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: One of my friend bought 500 stocks for Vrio company for 35 dollars each stock share and the next day some Japanese company bought this Vrio company and the stock price shot up to 65 dollars and he decided to sell it. Is this allowed or not allowed according to Sharia'h? Please email the answer.

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: I read that Islamic Banks usually make transfer of ownership just an option to sell at the end of a lease. Does this mean that during the commencement of the contract, Islamic Banks retain the ownership indefinitely and include an option to sell only if they feel it is rewarding?

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: Is there any right for a mudarib to share the incremental value ofthe rabbul maal's assets at the time of liquidation? Wassalam, Salim M Basalamah

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: Is the following transaction classified as Murabahah? If not, is it permissible? I invest a certain sum of money in a company to procure certain raw materials for a fixed rate of return and for a turnaround time of one month. The capital gets re-invested every month and I receive the income monthly as well.

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: is it okay to put money away for retirement? if so, do you recommend any specific type of funds?

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: My question is about taking a loan against my vested account balance. I've been told that any money borrowed must be repaid with interest. Essentially, I must repay myself with interest. I've made the argument with the plan administrators that since the account does not accumulate at some pre-determined fixed rate of interest (there is both chance of gain and loss) why should I be compelled to repay my loan with interest. They think that I should be glad to repay myself with interest and thereby protect myself from adverse market conditions, etc. I've explained my position with regards to Islam and they have still refused to honor my request for an interest free loan. What advice can you offer me? I could really use the loan to repair a house that I purchased interest-free.

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: (South America) I was particularly interested to know what kinds of sectors islamic investors should avoid, like the financial sector. I assume that some smaller banks generate more revenue from profits arising investment returns on deposits received. Does it make sense to say that in a scenario where 80% of the bank's revenue is generated from investment returns (from financing development projects), then from whatever returns I might make as a Muslim investor in this bank, I would have to cleanse 20%? I know that I am oversimplifying the scenario for most banks am not taking into account the fact that halaal investment projects in the bank might constitute only a small part of the bank's overall profit. But assuming a direct relationship (each % of halaal investment by the bank contributes 1% of profit to the banks bottom line), is my reasoning correct. I am also wondering to what extent my assumptions about the ratio of halaal to haram (investment vs loan financing) business dealings in a typical bank are sound.

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.

Question:: Why is hedging haram?