What type of Riba is prohibited ?
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which kind of Riba is prohibited?
The word Riba in Arabic literally means increase, gain or profit on money loaned.
No where in Quran Riba is prohibited.
The word used in Quran is Al-Riba (2275). This is a proper noun pointing out to something not just riba. The question is which form of riba is then partcularized as Al-riba.
If Quran is to be read with reference to the context then we must find out as to what are the circumstance under which increase, gain or profit on money loaned is prohibited?
To find out the context of Al-Riba Let us examine a couple of verses before and after the occurance of world Al-Riba in verse 2275.
Reading verse 2272 to 2280 we find that the issue discussed in these verses is, helping the poor deserving charity.
Explaining how to help a poor, Allah says " help them by way of charity or give them loan and charge no usury. Again Allah Says Such people may not be able to pay back the loan in time. If so, give them more time or remit the loan as charity. The debtor being discussed here is the poor deserving charity. (2/272-280) and certainilly not an enterpriser.
Amazingly, every where in Quran, Al-Riba is contrasted with Charity. This obviously means that Al-Riba is prohibited only where giving charity is called for.
Surprisingly again, the Qur'an nowhere condemns the giver of usury.This perhaps is because the givers of usury are the poor exploited to accept loans with usury.
All these facts put together are sufficient to prove that Quran prohibits charging of interest from the poor deserving charity.
An increase, gain or profit on commercial loans aimed at inflating resources is trading which Allah has excluded from the purview of Al-Riba.
This is what I think. I would be obliged if I am corrected.
Muhammad Latif Chaudhery
Student of Quran
Lahore, Pakistan -
peace,
Amazingly, every where in Quran, Al-Riba is contrasted with Charity. This obviously means that Al-Riba is prohibited only where giving charity is called for.
I have not researched it but that seems like a strong conclusion to draw based on what you said.
In any case, for those wishing to study the topic, the following is taken from Project Root List http//www.studyquran.co.uk/PRLonline.htm
= Ra-Ba-Waw = it increased/augmented, the practicing/taking of usury, excess/addition, an addition obtained more than what is supposed to be received, become high/grown up/large/swollen/risen, mount up, to grow/swell, out of breath, panting. rabiyatun - ever-increasing, severe. arba (comp. form) - more numerous, more increased.
raba vb. (1)
perf. act. 225, 4139
impf. act. 3039, 3039
pcple. act. 1317, 1692, 6910rabwah n.f. 2265, 2350
riba n.m. 2275, 2275, 2275, 2276, 2278, 3130, 4161, 3039
rabba vb. (2)
perf. act. 1724
impf. act. 2618arba vb. (4) impf. act. 2276
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which kind of Riba is prohibited?
Amazingly, every where in Quran, Al-Riba is contrasted with Charity. This obviously means that Al-Riba is prohibited only where giving charity is called for.
Surprisingly again, the Qur'an nowhere condemns the giver of usury.This perhaps is because the givers of usury are the poor exploited to accept loans with usury.
All these facts put together are sufficient to prove that Quran prohibits charging of interest from the poor deserving charity.
An increase, gain or profit on commercial loans aimed at inflating resources is trading which Allah has excluded from the purview of Al-Riba.
This is what I think. I would be obliged if I am corrected.
Muhammad Latif Chaudhery
Student of Quran
Lahore, PakistanSalam,
3130 O you who believe do not consume usury, compounding over and over; and revere God that you may succeed.
Read as many verses before and after the above verse and you will not encounter any mentioning of charity contrasting usury or otherwise. However, from the above verse one can understand that forbidden usury is when it compounds principal over and over; hence any profit that is less than the principal is okay to consume and is not considered usury.
To illustrate, let us say person 1 a family man with 2 children, uneducated regular individual with average income, inherited some money. Person 2, young entrepreneur has excellent skills and education and has come up with a very profitable trade but lacks the fund as he is still a very poor person.
Accepting your understanding of usury, person 1 will loan his money to person 2 with no interest for a one year. Person 2 will use the money he borrowed from person 1 at no interest to start his business. One year later, person 2 has built assists in his business, expanding a bit with the little profit he made. Though he did not make much of savings; he still generated good monthly income to sustain acceptable life style. However, as the due date for the loan is up, he is unable to pay. Person 2 is still following your understanding of usury, extended the loan term for another year.
By the end of second year person 2's business is booming and is making very good profit and savings; at the due date of the loan he returned the money he borrowed to person 1 with very warm appreciation and many thanks.
Person 1 received his money back, after calculating the inflation rate he lost 5 to 6 % of the value of his money and many other opportunities of possible benefits. One might argue that he gained quite a bit of good deeds for his afterlife. However one would also argue that had person 1 managed his money wisely he would have gained more money that in term would have been used to make more good deeds, perhaps closer to his home and children. As God informed us the close kin and relatives are to be favored with good deeds.
In the illustration above I would say that person 2, though the borrower; has exploited the ignorance of person 1 and compounded profits over and over using person 1's money without paying him any dues in return.
Person 1 should have asked and received profit that is less than his principal per term as that would not be consuming usury compounded over and over.In my readings, usury is cruel exploitation of ones hard need or ignorance regardless of his financial or social status to make compounded profits over and over.
4161 And for their taking of usury, while they were told not to do so, and for their consuming people?s money unjustly. We have prepared for the disbelievers amongst them a painful retribution.
In verse 2275 below, the usury mention is the same usury described in verse 3130 and 4161 which we believers are instructed not to consume.
2275 Those who consume usury do not rise except as one being influenced by the devil?s touch. That is because they have said ?Trade is the same as usury.? While God has made trade lawful and He has forbidden usury. Whoever has received understanding from His Lord and ceases, then he will be forgiven for what was before this and his case will be with God. But whoever returns, then they are the people of the Fire, in it they will abide eternally.
2276 God condemns usury, and He grants growth to the charities. And God does not like any wicked sinner.
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Peace all,
There is no such thing as different kinds of usury. Usury is exploiting the need of another person to extort a profit from the fruit of labour of that person. Practically speaking, when someone borrows money, he needs it, and usually no borrower will agree on interest. If he agrees, then he didn't need the money in the first place and he is going for investment which means the lender and the borrower were just splitting profits. Almost always, interest rates are extortions. Your income should only come from your labour or selling goods to buy someone else's labour or goods. Sadaqa is similar to usury because its money transfer without exhange of labour and goods. One is an act of greed and the other is an act of kindness.
Note that Sadaqat include spending on your family. The thing almost everyone does.
Peace,
Rami
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Peace "Rami",
Peace all,
There is no such thing as different kinds of usury. Usury is exploiting the need of another person to extort a profit from the fruit of labour of that person. Practically speaking, when someone borrows money, he needs it, and usually no borrower will agree on interest. If he agrees, then he didn't need the money in the first place and he is going for investment which means the lender and the borrower were just splitting profits. Almost always, interest rates are extortions. Your income should only come from your labour or selling goods to buy someone else's labour or goods.
JK- People often need to borrow things. I hope you arnt saying that lending out something is Riba for that woudnt make any sense. If not then our income can well come from lending out things. Apart from that one is also entitled to income through someones use of ones patent or selling thereof which is not a physical good or labour.
Sadaqa is similar to usury because its money transfer without exhange of labour and goods. One is an act of greed and the other is an act of kindness.
Note that Sadaqat include spending on your family. The thing almost everyone does.
Peace,
Rami
JK- So sadaqat would be forbidden by GOD according to you? Remember GOD forbade usury so everything falling under that category would automatically be prohibited. GOD Bless!
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Peace "Rami",
JK- People often need to borrow things. I hope you arnt saying that lending out something is Riba for that woudnt make any sense. If not then our income can well come from lending out things. Apart from that one is also entitled to income through someones use of ones patent or selling thereof which is not a physical good or labour.
JK- So sadaqat would be forbidden by GOD according to you? Remember GOD forbade usury so everything falling under that category would automatically be prohibited. GOD Bless!
Lending is allowed because you will return the money later on. Sadaqat is done out of free-will but interest exploits the need of the borrower.
Peace,
Rami
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Peace "rami",
Lending is allowed because you will return the money later on. Sadaqat is done out of free-will but interest exploits the need of the borrower.
Peace,
Rami
JK- Interest is nothing but lending out a currency and if you are careful you'll return that too. If you're not careful you might not be able to even return anything you borrowed so does that make lending Riba? I've heard the argument before that lending out money is what is considered Riba. OK well anything that has an exchange value in the market is technically money i.e. gold, beans, vehicles, britney's hair, appartments, shops, etc so non of those should be lent if we accept that definition. ON THE OTHER HAND CURRENCIES, although commonly called so, ARE TECHNICALLY NOT EVEN MONEY. Theyr tokens for money. So lending out currencies, i.e. interest, cannot be considered Riba even by this absurd definition. GOD Bless!
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Peace "rami",
JK- Interest is nothing but lending out a currency and if you are careful you'll return that too. If you're not careful you might not be able to even return anything you borrowed so does that make lending Riba? I've heard the argument before that lending out money is what is considered Riba. OK well anything that has an exchange value in the market is technically money i.e. gold, beans, vehicles, britney's hair, appartments, shops, etc so non of those should be lent if we accept that definition. ON THE OTHER HAND CURRENCIES, although commonly called so, ARE TECHNICALLY NOT EVEN MONEY. Theyr tokens for money. So lending out currencies, i.e. interest, cannot be considered Riba even by this absurd definition. GOD Bless!
Peace jonny_k,
Lending cannot be Riba as there is no increase in the value of the capital lent. Any return on capital without putting labor in is Riba. We can say Riba means Rent. Renting money or property is considered Riba. Regarding central banks, they lend you a currency on interest. The trick is that the interest doesn't even exist in the economy, so the central bank will have to print more and cause inflation devaluing the currency and wasting your fruit of labor. This money is created out of thin air then the interest goes to the bankers just because they are the one allowed to print money. They are simply stealing the fruit of labor of every citizen in the country. If that is not Riba, what is?? The original fathers of America knew this.
http//servantofthelight.com/content/view/13/36/
http//www.tolueislam.com/Parwez/QL/QL_8.htm
http//www.youtube.com/watch?v=__YFnUfYXZk
http//www.youtube.com/watch?v=lXb-LrVkuwMPeace,
Rami
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Peace "rami"
Peace jonny_k,
Lending cannot be Riba as there is no increase in the value of the capital lent. Any return on capital without putting labor in is Riba. We can say Riba means Rent. Renting money or property is considered Riba.
JK- Wait right here. So putting up a car or an appartment for rent is RIBA???!!!
Regarding central banks, they lend you a currency on interest. The trick is that the interest doesn't even exist in the economy, so the central bank will have to print more and cause inflation devaluing the currency and wasting your fruit of labor. This money is created out of thin air then the interest goes to the bankers just because they are the one allowed to print money. They are simply stealing the fruit of labor of every citizen in the country. If that is not Riba, what is?? The original fathers of America knew this.
JK- Every bank is not allowed to print money, mostly only central banks have that permission. Interest can also be charged by anyone who lends out currency even private people. Nobody is stealing anything. It is marketing and advertising. If you consider making money via advertisment and marketing other peoples products as Riba then i have a serious problem with that too and thats what banks technically do. They market our deposited product, currency, and lend it out to others. Then they make a profit from that via interest and give part of that to us whove an account with them. GOD Bless!
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Peace jonny_k,
JK- Wait right here. So putting up a car or an appartment for rent is RIBA???!!!
Most probably yes. It is a return without labor. If you rent a car, it is like borrowing a sum of money. You will return the car and so is the money. So the rental cost is the same as interest. This is not trade. If your capital generate money without you putting labor, you are simply taking the fruit of labor of others without losing yours.
JK- Every bank is not allowed to print money, mostly only central banks have that permission. Interest can also be charged by anyone who lends out currency even private people. Nobody is stealing anything. It is marketing and advertising. If you consider making money via advertisment and marketing other peoples products as Riba then i have a serious problem with that too and thats what banks technically do. They market our deposited product, currency, and lend it out to others. Then they make a profit from that via interest and give part of that to us whove an account with them. GOD Bless!
Again, same thing here. Creation of buying power without labor. This is Riba.
Peace,
Rami
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Peace "rami",
Peace jonny_k,
Most probably yes. It is a return without labor. If you rent a car, it is like borrowing a sum of money. You will return the car and so is the money. So the rental cost is the same as interest. This is not trade. If your capital generate money without you putting labor, you are simply taking the fruit of labor of others without losing yours.
JK- Then why hasnt anyone, not even the sunni/shia, ever come up with such being Riba? What about renting out an appartment or a house?
Again, same thing here. Creation of buying power without labor. This is Riba.
Peace,
Rami
JK- Mental labor is also considered physical in the sense that neurons fire and that is physical and requires more energy if one has to think more. This can well be considered labor and often is harder than labor done with ones hands. All this is also required if one has to advertise a product in order to attract people so that they rent something. So last but not least it is all labor at one level or the other and can therefore according to your own definition not be Riba. GOD Bless!
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Peace jonny_k,
JK- Then why hasnt anyone, not even the sunni/shia, ever come up with such being Riba? What about renting out an appartment or a house?
Sunni/Shia are brain dead. All rentals are Riba.
JK- Mental labor is also considered physical in the sense that neurons fire and that is physical and requires more energy if one has to think more. This can well be considered labor and often is harder than labor done with ones hands. All this is also required if one has to advertise a product in order to attract people so that they rent something. So last but not least it is all labor at one level or the other and can therefore according to your own definition not be Riba. GOD Bless!
Ofcourse, you can charge for the minute labor you have put in only and not the cost of owning the property for a while. Mental labor is ok because its work. Labor is the key to making money. Labor is even required to increase the value of capital, this is what we call the profit margin. So you buy product A, put in labor to become product B and sell it. The profit represent your labor. The more labor you put, the bigger the profit margin.
Peace,
Rami
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Peace "rami",
Peace jonny_k,
Sunni/Shia are brain dead. All rentals are Riba.
JK- The whole fabric of any society since the dawn of humanity is based on rentals and that in general doesnt harm anyone. It doesnt make sense to say that this is what GOD should have termed as the despicable Riba in the Quran.
Ofcourse, you can charge for the minute labor you have put in only and not the cost of owning the property for a while. Mental labor is ok because its work. Labor is the key to making money. Labor is even required to increase the value of capital, this is what we call the ow can profit margin. So you buy product A, put in labor to become product B and sell it. The profit represent your labor. The more labor you put, the bigger the profit margin.
Peace,
Rami
JK- What about the labor used to get an object ready to be rented out in the first place? Does that not count? GOD Bless!
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Peace jonny_k,
JK- The whole fabric of any society since the dawn of humanity is based on rentals and that in general doesnt harm anyone. It doesnt make sense to say that this is what GOD should have termed as the despicable Riba in the the Quran.
Then what is Riba of the Quran??
JK- What about the labor used to get an object ready to be rented out in the first place? Does that not count? GOD Bless!
That object should be sold and the profit margin is the labor used to get the object ready. You can ofcourse charge the person being lent a property any services you will provide. But Rent in reality is exactly like interest. The cost for owning capital for a period of time. This is ofcourse theoritical economics and I don't know how this will work out on the large scale. But I guess for this to work, Zakat is mandatory. The surplus money should be given to people who can't do labor. This is the missing link Karl Marx was looking for. An act of kindness!
Peace,
Rami
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Peace "rami",
Peace jonny_k,
Then what is Riba of the Quran??
JK- It is the opposite of charity. Just see how many times riba is contrasted with charity. If you exploit people whor poor by asking from them money instead of just providing for them some help without asking anything in return that is Riba. Bro Edip has written an article on this
http//www.yuksel.org/e/religion/unorthodox.htm#USURYThat object should be sold and the profit margin is the labor used to get the object ready. You can ofcourse charge the person being lent a property any services you will provide. But Rent in reality is exactly like interest. The cost for owning capital for a period of time. This is ofcourse theoritical economics and I don't know how this will work out on the large scale. But I guess for this to work, Zakat is mandatory. The surplus money should be given to people who can't do labor. This is the missing link Karl Marx was looking for. An act of kindness!
Peace,
Rami
JK- If i have a car which i dont want to give up forever but someone asks me that he wants to take a drive in it. He's a wealthy person. Should i just give it to him for free? Would it be forbidden to charge him money for using my car? Remember he cld be renting the car for enjoyment or for testing various models for his statistics. Also consider inheritance. Children do NO LABOR AT ALL for receiving that and yet the Quran even recommends parents to write down a will for the inheritance. Please refer to the above article. Youll see it makes perfect sense whilst your theory does not. GOD Bless!
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Peace johnny_k,
This article is exactly what I read in Arabic by Ahmad Mansoor. They argue that 'riba' is charging interest when lending to poor people as an act of charity.
- Lending is not charity. It is a humanitarian act but not 'sadaqa'. Only a good deed.
- Charities never return so there is no such thing as charging interest in charities.
- People borrow money because they need it.
- No borrower will accept interest so interest is almost always forced.
- Interest is usury is Riba.
Peace,
Rami
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Peace "rami",
Peace johnny_k,
This article is exactly what I read in Arabic by Ahmad Mansoor. They argue that 'riba' is charging interest when lending to poor people as an act of charity.
- Lending is not charity. It is a humanitarian act but not 'sadaqa'. Only a good deed.
JK- Lending maybe both a humanitarian act and a business as well. In te latter case it is not riba. thats the whole point.
- Charities never return so there is no such thing as charging interest in charities.
JK- The point is if we know someone is poor yet lend him something and ask something in return that is whats being addressed. In other words YOU DONT DO BUSINESS WITH SUCH NEEDY PEOPLE AND IF YOU DO ITS RIBA. What your doin is turning a particular business into Riba which is exactly what the Quran warns of. It states
2275 ... they claim BUSINESS is like usury(Notice theyr NOT saying usury is like business). However, GOD permits trade, and prohibits usury.
The people are wanred here by GOD to not call any business as riba and in other words clearly contrasts Riba with charity so it has nothing to do with business at all.- People borrow money because they need it.
JK- Not necessarily. Most people borrow money because they want to make for themselves a big business or get expensive luxurious cars and houses which they cant pay for all at once. No one reqeires to open a big business or get those luxurious cars and houses.
- No borrower will accept interest so interest is almost always forced.
JK- most borrowers prefer interest over profit sharing any day if they think there business will run successfully because interest rates are only like 10% and they could be aking 100% or more profit if the business runs successfully and dont wanna give away 30-40% profit which the lender would then request for. Moreover profit sharing requires the banks, which are now big instituoins, to run after their clients which is impractical so they set the rates in advance. Why should a bank give people money for free who wanna open their own mcd or bruger king? dont you see how ridiculous that is?
- Interest is usury is Riba.
Peace,
Rami
JK- As ive explained this is nonsense just like your statement that all rental is riba. GOD Bless!
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Peace again "rami",
Consider this example of car rental also. A person wants to test drive ten different cars over a period of ten days, one on each day. Each of those cars, same years old, would cost him USD 20,000 in the market and you know how difficult it is to resell ones car for even the same price as one bought it and many times even close to the buying price. Thus he would be risking alot should he buy one, try it out and then resell it the next day. On the other hand theres a car rental offering each of these cars for USD 70 per day. Hed now pay USD 700 and woudlve tried out all cars without risking anything. If he wouldve bought a car each time at USD 20,000 and the next day even sell it at USD 19,500 hed be suffering a loss of USD 5000. So actually the rental benefited him. So why are you degrading the Quran to such as if the Author didnt know this? It is crystal clear that Riba is something which all ahumans know is instinctively wrong. Some people, especially the sunni/shia like to play with this term whenever they wanna prohibit something which GOD hasnt thus claiming "this transaction/busness/trade is like riba. haram.haram". how did GOD answer "GOD permits trade/business/transactions and He prohibits Riba" whilst in other verses very clearly contrasting it with charity. GOD Bless!
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O
I understand it like this
Those who eat exorbitant gains on capital, they cannot stand except in the manner one such person stands whom cobra has made stupefied/bushed by his touch. This is for the reason they said, "indeed forward commitment commerce is similar to gain on capital/usury", while Allah has declared forward commitment commerce as permissible and prohibited gain/usury on capital. Therefore the one whom advice from his Sustainer Lord has reached and in compliance thereof he abstained then that is for him that was done earlier and his matter is towards Allah. And whoever despite advice does/reverts to it then for this reason such are the people who are the companions of Fire/Hell Prison where they shall abide perpetually.I understand that is only such transaction where the payment against the goods/property/tangible things is to be made at a later date on the expiry of settled period. In such transaction the price charged is higher proportionately to the appointed time than the on spot cash price. Same is with Riba, no goods but just capital/cash lending. Allah has answered the opinion of people without arguing by giving the verdict that He is declared one as permissible and the other as Prohibited.
