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Interest Is Forbidden In Islam

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Lets us define:

 

1) Interest (noun): Finance.

 

a. a sum paid or charged for the use of money or for borrowing money.

b. such a sum expressed as a percentage of money borrowed to be paid over a given period, usually one year. (Dictionary(contact admin if its a beneficial link))

 

2) The Definition Of Interest

 

The literal meaning of interest or Al-RIBA as it is used in the Arabic language means to excess or increase. In the Islamic terminology interest means effortless profit or that profit which comes free from compensation or that extra earning obtained that is free of exchange. Riba` is a loan with the condition that the borrower will return to the lender more than and better than the quantity borrowed.

 

3) Usury (noun) : The practice of lending money and charging the borrower interest. (American Heritage Dictionary)

 

4) Riba : Riba literally means 'to grow; to increase.' Technically, it denotes the amount that a lender receives from a borrower at a fixed rate in excess of the principal. It is of two kinds:

i) Riba Nasi'a - taking interest on loaned money.

ii) Riba Fadal - taking something of superior quality in exchange for giving less of the same kind of thing of poorer quality.

 

Riba is any contractual increment in a lending relation. It is prohibited and considered one of the major sins and acts of disobedience to Allah. The parties to a Riba-based contract are declared war on by Almighty Allah and His Messenger, as stated in the Qur'an, Surat Al-Baqarah 2, verse 279: “And if ye do not, then be warned of war (against you) from Allah and His messenger.”

 

From the terminology above, we know that:

 

1) Riba is usury.

 

2) Taking interest on loaned money is Riba.

 

Interest of any kind is forbidden in Islam.

 

How Is Interest Illegal

 

The definition of interest has already been mentioned as well as that it is prohibited. If we explore the Qur’an we will come across at least four places where Allah has mentioned interest.

 

The first one is in Surah Al-baqarah verse no.275

 

"Those who devour usury will not stand except as stands one whom the Satan by his touch has driven to madness. That is because they say, "trade is like usury", but Allah has permitted trade and has forbidden usury",

 

In the next verse verse 276 in the same place he says,

 

"Allah will deprive usury of all blessing, and will give increase for deeds of charity, for he does not love any ungrateful sinner."

 

Two verses later in verse 278 he says,

 

"Oh you who believe! Fear Allah and give up what remains of your demand for usury if you are indeed believers."

 

In verse 279 he says,

 

"If you do not, take notice of war from Allah and his Messenger sallallahu alaihe wasallm but if you repent you shall have your capital sum. Deal not unjustly and you shall not be dealt with unjustly."

 

In the second place in Surah Aal-Imran, verse no.130 Allah says,

 

"Oh you who believe! Devour not usury doubled and multiplied; but fear Allah that you may prosper."

 

In the third place in Surah Al-Nisaa’ Allah states in verse 161,

 

"That they took usury though they were forbidden and they devoured peoples wealth wrongfully; we have prepared for those amongst them who reject faith a grievous chastisement."

 

In the fourth place, Surah Al-Room, verse no.39 Allah mentions

 

"That which you give in usury for increase through the property of people will have no increase with Allah: but that which you give for charity seeking the countenance of Allah, it is these who will get a recompense multiplied."

 

Ahaadith Concerning Interest

 

These ahaadith have been taken from Mishkat-ul-Masabih under the section of interest and the English translation has been taken from its English version written by Al Hajj Moulana Fazl Karim (218-227 vol. II)

 

Hazrat Jabir radiyallahu anhu has reported that the Messenger of Allah sallallahu alaihe wasallm cursed the devourer of usury, its payer, its scribe and its two witnesses. He also said that they were equal (in sin).

(Muslim)

 

Hazrat Abu Hurairah radiyallahu anhu reported that the Holy Prophet sallallahu alaihe wasallm said: A time will certainly come over the people when none will remain who will not devour usury. If he does not devour it, its vapour will overtake him.

(Ahmed, Abu Dawood, Nisai, Ibn Majah.)

 

Hazrat Abu Hurairah radiyallahu anhu reported that the Messenger of Allah sallallahu alaihe wasallm said : Usury has got seventy divisions. The easiest division of them is a man marrying his mother.

(Ibn Majah)

 

Hazrat Abu Hurairah radiyallahu anhu reported that the Messenger of Allah sallallahu alaihe wasallm said: I came across some people in the night in which I was taken to the heavens. Their stomachs were like houses wherein there were serpents, which could be seen from the front of their stomachs. I asked: O Gabriel! Who are these people? He replied these are those who devoured usury.

(Ahmed, Ibn Majah)

 

Hazrat Ali radiyallahu anhu reported that he heard the Messenger of Allah sallallahu alaihe wasallm cursing the devourer of usury, its giver, its scribe and one who refuses to give Zakat and he used to forbid mourning.

(Nisai)

 

Hazrat Umar bin Al-Khattab radiyallahu anhu reported: the last of what was revealed was the verse of usury. The Messenger of Allah sallallahu alaihe wasallm was taken and he had not explained it to us. So, give up usury and doubt.

(Ibn Majah, Darimi)

 

Hazrat Abdullah bin Hanzalah radiyallahu anhu (who was washed by the angels) reported that the Messenger of Allah sallallahu alaihe wasallm said: A dirham of usury that a man devours and he knows is greater than 36 fornications.

(Ahmed, Darqutni)

 

Baihaqi reported from Ibn Abbas radiyallahu anhu in shuabul iman. He added and said: (as for) one whose flesh has grown out of unlawful food, the fire is more suitable for him.

 

Conclusion:

 

Riba is any contractual increment in a lending relation. It is prohibited and considered one of the major sins and acts of disobedience to Allah. The parties to a Riba-based contract are declared war on by Almighty Allah and His Messenger, as stated in the Qur'an, Surat Al-Baqarah 2, verse 279: “And if ye do not, then be warned of war (against you) from Allah and His messenger.”

 

The Prophet, peace and blessings be upon him, invoked the wrath of Allah on the person who deals with Riba, the one who gives it and the person who writes its contract. The Prophet, peace and blessings be upon him, also classified dealing with Riba as worse than adultery. Both sayings of the Prophet are classified as authentic Hadith.

 

After narrating all these verses from the Qur’an and relating all the Ahaadith it is apparent to us that interest could never be legal and halal. How could anybody even take the time out to think about a matter in which Allah has declared war on the user and his Beloved Prophet sallallahu alaihe wasallm has cursed him? As sensible people we can understand that what our creator has chosen for us is for our own prosperity only.

 

References:

 

1) (you are not allowed to post links yet)"you can't post links until you reach 50 posts_you are not allowed to post links yetinter-Islam(contact admin if its a beneficial link)/Prohibitions/intrst.htm"]you can't post links until you reach 50 posts_you are not allowed to post links yetinter-Islam(contact admin if its a beneficial link)/Prohibitions/intrst.htm[/url]

 

2) (you are not allowed to post links yet)"you can't post links until you reach 50 posts_you are not allowed to post links yetislamonline(contact admin if its a beneficial link)/servlet/Satellite?pagename=IslamOnline-English-Ask_Scholar/FatwaE/FatwaE&cid=1119503543596"]you can't post links until you reach 50 posts_you are not allowed to post links yetislamonline(contact admin if its a beneficial link)/servlet/Satelli...d=1119503543596[/url]

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Salamz

I was wondering two things:

 

 

1.Considering Inflation, when a loan is returned adjusted for inflation, does that counted as interest?

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Salamz

I was wondering two things:

1.Considering Inflation, when a loan is returned adjusted for inflation, does that counted as interest?

 

 

yes it is raba not riba

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yes it is raba not riba

Below is the definition of Raba I got from (you are not allowed to post links yet)"you can't post links until you reach 50 posts_you are not allowed to post links yetauburnmountain(contact admin if its a beneficial link)/ThePractice/IslamicFinance.aspx"]you can't post links until you reach 50 posts_you are not allowed to post links yetauburnmountain(contact admin if its a beneficial link)/ThePractice/...micFinance.aspx[/url]

 

Riba Is Extracted From Raba

The word Riba is extracted from Raba. The literal meaning of interest or Al-RIBA as it is used in the Arabic language means to excess or increase. In Islamic terminology interest means effortless profit or that profit which comes free from compensation or that extra earning obtained that is free of exchange.

 

So if paper money backed by gold is adjusted for inflation how exactly is it an interest? bcaz technically even though the dollar amount of my return may increase, the gold backing it up may not ..how does it make sense then? bcaz If i were to lend my friend 10000g for business lets say..( it's hypothetical bcaz im poor) i will actually loose bcaz the 10g will have less purchaisng power upon return.

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Salamz

I was wondering two things:

1.Considering Inflation, when a loan is returned adjusted for inflation, does that counted as interest?

 

Let us consider three cases below:

 

1) Let us assume that I lend you $1000 and then you pay me back $ 1000 after a year. This is not Riba because I do not take interest on the loaned money.

 

2) If I demand you to pay me $ 1500 after a year due to the inflation and you return $1500 to me more than and better than the quantity borrowed, this is riba for you have to pay me more than you should pay me. And this is unfair for you because you have to pay me more than the quantity you borrow from me.

 

3) If the government revaluate its currency and you return $ 600 to me less than the quantity borrowed, it is unfair for me for I would lose $400.

 

People borrow money because they don't have enough money to meet their needs. If a poor man borrow $1000 from you so that he can feed his family and you ask him to pay you $1500 after 6 month, you are not helping him. You make his suffering worse for he has no money to meet your demand and then you extend the period by asking him to pay $2000 after a year. You are making his life more miserable and he becomes poorer and you may ruin his family.

 

In Surah Al-Nisaa’ Allah states in verse 161:

 

"That they took usury though they were forbidden and they devoured peoples wealth wrongfully; we have prepared for those amongst them who reject faith a grievous chastisement."

 

In Islam, the lender and the debtor have to take the risk of revaluation or inflation. It is the duty of Muslims to help other Muslims sincerely and honestly.

 

In Surah Al-baqarah verse no.275

 

"Those who devour usury will not stand except as stands one whom the Satan by his touch has driven to madness. That is because they say, "trade is like usury", but Allah has permitted trade and has forbidden usury",

 

In the next verse verse 276 in the same place he says,

 

"Allah will deprive usury of all blessing, and will give increase for deeds of charity, for he does not love any ungrateful sinner."

 

Two verses later in verse 278 he says,

 

"Oh you who believe! Fear Allah and give up what remains of your demand for usury if you are indeed believers."

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salam

 

there is a thread in the counselling section regarding someone who's having a dilemma about taking out an interest based loan.

 

i read a book, i think last year, about the concept of interest and how it ties in with modern Islamic banking. here's a preview of the book:

 

(you are not allowed to post links yet)"you can't post links until you reach 50 posts_books.google.co.uk/books?id=ybnkig5ci6cC&printsec=frontcover&dq=Interest+in+Islamic+Economics:+Understandin+Riba&source=bl&ots=1vgnS7-glm&sig=EVpD86pxAsM3V5OTlpLsuLn7G9c&hl=en&ei=CzLQS8S5O82y-AbR4PQs&sa=X&oi=book_result&ct=result&resnum=1&ved=0CAsQ6AEwAA#v=onepage&q&f=false"]you can't post links until you reach 50 posts_books.google.co.uk/books?id=ybnkig5...p;q&f=false[/url]

 

in this book, it goes through the history of the terms interest, usury and riba. riba is never defined in the quran. how come? well, neither is alcohol, pork or gambling. the reason is that riba was a very well known term to the arabs and thus Allah did not need to define it in His book. the author found that the earliest hadith that define riba in muwatta of malik is as follows.

 

Zayd ibn Aslam said, "Riba in the Jahiliyyah was that a man would have a debt on a man for a set term. When the term was due, he would say, 'Will you pay it off or increase me?' If the man paid, he took it. If not, he increased him in his debt and lengthened the term for him."

 

Book 31, Number 31.38.84:

(you are not allowed to post links yet)"you can't post links until you reach 50 posts_you are not allowed to post links yetusc.edu/schools/college/crcc/engagement/resources/texts/muslim/hadith/muwatta/031.mmt.html#031.31.16.34"]you can't post links until you reach 50 posts_you are not allowed to post links yetusc.edu/schools/college/crcc/en...ml#031.31.16.34[/url]

 

the book goes on to show that imam shafii and imam ibn hanbal defined riba in the same way. what is clear is that the riba of pre-Islam arabia is not the same as what we call interest today.

 

although the book was impartial, and did not try to give an answer either way, you are left with the impression that latter scholars expanded the meaning of riba to include interest.

 

some of the harms of pre-Islam practise of riba are explained.

 

poor people used to seek loans from those with wealth to try and get themselves out of poverty. when the time of payment came, and the borrower could not repay the debt, the lender would defer the payment but would double the debt. if this happened a second time, the lender would triple the debt. by the third time, the borrower would either have to give one or some of his sons as payment or submit himself to be the slave of the lender to repay the debt.

 

this evil practise was banned by the quran.

 

the doubling and tripling of the debt is considered riba or usury. but that's not how interest is charged today. the repayment is defined before the loan agreement and there is no precedent for doubling or tripling the debt at time of payment.

 

i'm not saying interest is halal, but i am saying that there is evidence that how riba was defined during time of the revelation of the quran is not what interest is today. perhaps we should not judge others so harshly when they take out loans etc. and try to learn more on the subject.

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:sl:

 

We should stick to what the scholars have said regarding the issue. Our scholars have dedicated their lives to studying Islaam, so I don't see why anyone would need to take their religion from so and so who hasn't studied Islaam. The same can be said about what you posted about homosexuals.

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to stick to what the scholars have said, you have to know what they said in the first place.

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