Meet the Scholar
Mufti Hassaan Kaleem is an eminent Sharia'a Scholar and a leading expert in the field of Islamic Banking and Takaful (Islamic insurance). He is trained by and continues to work closely with the leading Sharia’a Scholar, Sheikh Muhammed Taqi Usmani, Chairman of the AAOIFI Sharia’a Board.
His involvement with Deloitte commenced in 2007 in an unprecedented move, to work alongside the Islamic Finance team, providing specialist Sharia’a input into Deloitte engagements.
In the hot seat
Mufti Hassaan took time out to answer some questions and give an insight into his background and explain what his role as a Sharia’a advisor entails.
- So Mufti Hassaan Kaleem, tell us a bit about yourself?
- We hear a lot of statements that there is a shortage of qualified Sharia’a Scholars in the Islamic Finance industry, so what does it actually take to become a Sharia’a Scholar?
- Can you give us details about the training you went through?
- That is a very broad range of subjects, what made you decide to specialize in Islamic Finance?
- Given that there are no recognized qualifications for Sharia’a scholarship in Islamic Finance, how can one determine if someone is in fact sufficiently qualified to be one?
- Can you give us some examples of financial institutions that you have been involved in and the boards that you sit on?
- The role and work of Sharia’a Scholars in Islamic Finance is often misunderstood, and is sometimes seen as being very secretive. Can you perhaps shed light on this and explain what happens at a typical Sharia’a Supervisory Board meeting?
- Some people argue that there might be a conflict of interest between Scholars who sit on Sharia’a Supervisory Boards and are also remunerated by those same institutions, what is your view?
- Do you believe the Islamic Finance industry is being hindered by a lack of Sharia’a standardization?
- Deloitte is unique amongst professional services firms in directly engaging the services of a Sharia’a Scholar, what do you think are the advantages of this approach?
- What kind of projects have you been involved in since joining the Deloitte team?
I continue to live and work in Karachi, Pakistan where I completed my Islamic studies at Jamia Darul Uloom Karachi, a world renowned institute for Islamic sciences. The institution is the largest and most renowned Islamic educational institution in Pakistan imparting deep knowledge of Islamic sciences and producing scholars in Sharia’a.
Sharia’a guides Muslims in each and every aspect of their lives, it is comprehensive in its nature. To attain the level of knowledge which enables one to study and understand the original sources of Sharia’a and to comprehend the detailed literature developed over the centuries, takes many years. Naturally after that, like any other area gaining relevant experience is a must.
After completing high school my specialized training commenced. This started with learning the Arabic language (essential given that it is the language of the original sources of Sharia’a, Quran and Sunnah). Arabic language is taught in great detail covering grammar, classical literature, writings and poetry. Additional subjects were then introduced including:
- Fiqh (Islamic jurisprudence)
- Usool Al Fiqh (Basic Principles of deriving Sharia’a rulings from the original sources)
- Sunnah (the sayings, acts and approvals of the Prophet Mohammad peace be upon him)
- Usool Al Hadith (principles of validation of narrations from the Prophet, peace be upon him)
- Tafsir (commentary of Quran)
- Usool Al Tafsir (principles of establishing commentary of Quran) and some other supplementary subjects.
Each subject from this list is taught in levels that gradually increase in complexity. Fiqh is taught to a very advanced level where the basis of rulings, the different opinions of great scholars and their analytical arguments are discussed in detail. I was then required to complete four years of intensive studies in Fiqh. One cannot completely understand the process of deriving rulings from the sources and use of analogy unless they have a good understanding of Arabic and Usool Al Fiqh.
In addition, a few related subjects are also taught such as Mantiq (Logic), astronomy and some special areas of mathematics. These subjects indirectly support the understanding of many principles and arguments in Fiqh.
After completing this study over eight years, there are options for specialization in some areas. My specialization was in Ifta (Islamic case law) which took a further three years to complete. Understood simply Ifta is learning the practical application of Fiqh (Islamic Jurisprudence) during which the student has to study: the principles of giving verdicts; comprehensive Fiqh books; compendiums of contemporary and traditional Fatwa (scholarly verdicts); along with practice of writing verdicts under the guidance of senior experienced scholars of the field.
During my specialization and thereafter I took special training in Islamic finance and insurance which is a complete branch of Fiqh and Fatwa. To work as a Sharia’a advisor in Islamic finance requires in-depth knowledge of Fiqh and specifically skills of Islamic case law. By the blessing of Allah (the Most High) my previous studies and special training helped me a lot in this field.
In my view the basic requirements for individuals considering becoming a Sharia’a advisor in Islamic finance are: in-depth study of Islamic sciences from a reputable institution; sufficient experience of teaching fiqh or undertaking considerable research work; substantial relevant theoretical and practical knowledge of banking and finance generally and Islamic finance specifically.
Islamic finance activities can be broadly divided into three major areas: Banking; Insurance / Re-insurance and Islamic investment funds or similar activities. By the grace of the Almighty, I have had considerable experience of working in all these three areas as resident Sharia’a advisor or Sharia’a board member. Beside that I have had opportunities to work for different technical bodies and committees at the State Bank and Securities and Exchange Commission in Pakistan.
Q: The role and work of Sharia’a scholars in Islamic Finance is often misunderstood, and is sometimes seen as being very secretive. Can you perhaps shed light on this and explain what happens at a typical Sharia’a Supervisory Board meeting?
There is nothing secretive at all about how Sharia’a boards operate. AAOIFI has described how Sharia’a boards should function and what their possible terms of reference should be. Sharia’a boards function as any other authoritative body according to a code of conduct and all proceedings of the meetings are duly minuted. Before resolving any ruling the Sharia’a board will undertake detailed deliberation and will closely liaise with the management in this process. This is what standard practice should be, and I hope all Sharia’a boards abide by these standard practices.
The role of the Sharia’a board should not be seen any differently from the role of external auditors and lawyers. When there is no conflict of interest in the auditors’ and lawyers’ role despite being remunerated by the companies, there should be no conflict in the role of Sharia’a boards too. The Sharia’a board’s autonomy and its ability to operate without any influence from the management is undoubtedly important and should be ensured in all cases.
I have heard this argument in almost every conference I have attended. When issues of Islamic finance came under discussion by non Sharia’a scholars they consider the lack of standardization in Sharia’a rulings as one of the hindrances in the progress of the industry. But to me it is a myth rather than a true reality. You will never find scholars considering it as a hindrance, because they know that difference of opinions based on correct arguments is very natural in those situations where there are no clear verdicts concerning them in Sharia’a. It is also a fact that when there is a need for a collective view, scholars do agree on common features and come up with something that is uniform for practical use. AAOIFI’s Sharia’a standards are seen amongst the scholars of the industry as a strong basis for standardization, even though all rulings within it are not attested by everyone in their personal capacity. I think these standards are evidence enough to refute this myth.
I think having direct Sharia’a advice beside other necessary expertise is useful in that experts will be guided in all aspects of their structuring, consulting and tax advice from a Sharia’a point of view, so naturally the outcome will be very close to the one that would be acceptable to Sharia’a. In this way their advice will be more beneficial for their clients. It has been witnessed that a deal will go a long way and incur huge expenses but at the end it does not get Sharia’a approval or is not appreciated by the majority of Sharia’a scholars. Involvement of Sharia’a advice from the very outset of the process will help in avoiding such situations.
I have been involved in a variety of projects like structuring deals, defining the complete road map of an institution, tax related structuring, internal audit and decoding of mysterious structures of Islamic finance! It has enabled me to gain exposure to complex and innovative areas of Islamic finance, and this is what I like most about my role.