What type of Riba is prohibited ?
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Peace jonny_k and Mazhar,
I will take this a bit deeper down the rabbit hole. People were saying selling is like interest because they are both increases on capital but God insisted that selling is permissible but Riba is not. Why? The answer is in the nature of the capital itself. In selling, the capital is lost but in Riba, the capital remains. So if you are in the rental business or banking, you are making money and keeping your capital at the end of the day. With the help of modern technology, services can be recorded and sold over and over again though it took the artist for example one shot. It is a like a surgeon doing an appendectomy once and getting money for every appendectomy afterwards without actually doing it.
Therefore if capital will never return, the increase is called profit. But if the capital will eventually return, the increase is called Riba.
Peace,
Rami
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Peace "rami",
Peace jonny_k and Mazhar,
I will take this a bit deeper down the rabbit hole. People were saying selling is like interest because they are both increases on capital but God insisted that selling is permissible but Riba is not.
JK- BAIH does not just mean selling but business in general which includes buying and selling. As for your statement "people were saying baih is like riba beucause theyr both increases on capital that doesnt make any sense. People mustve known instinctively what Riba meant and they were tryin to categorize legitimate trade as Riba thus making it prohibited. Moreover Riba<>Interest. Interest is legitimate BAIH.
Why? The answer is in the nature of the capital itself. In selling, the capital is lost but in Riba, the capital remains. So if you are in the rental business or banking, you are making money and keeping your capital at the end of the day. With the help of modern technology, services can be recorded and sold over and over again though it took the artist for example one shot. It is a like a surgeon doing an appendectomy once and getting money for every appendectomy afterwards without actually doing it.
JK- Is there any other person on this planet you know off, besides you, who claims that Riba includes all kinds of rental? I sure havnt heard of anyone neither now nor in history books. So that means everyone has been consuming the evil Riba and didnt keep up with this important Quanic command except for you? Seems quite illogical doesnt it?
As for the services argument one can considser lending a currency a service for example and say that ok the %age is now charged as the service of lending because to setup the system requires mental as well as physical labor. The outcome would be the same, just the wording be different. So that doesnt make any sense whatsoever.Therefore if capital will never return, the increase is called profit. But if the capital will eventually return, the increase is called Riba.
Peace,
Rami
JK- Where do you derive this understanding from? Let me then give you another example how one could get around thus definition but technically have the same effect. Say a person wants to buy a house but cannot pay for it all at once. The bank now buys the house for the guy at a price considerably lower than it would be selling it to it's customer. The difference it would make equal to the otherwise amount of interest charged all other security issues being equally applied. According to your definitio0n this isnt Riba but is exactly the same technically. INFACT it can be even worse since interest is anually so if the buyer did pay back al the money for the house in the first yr or two years he wldve only paid like say 16% more than the sellers price of the house. Now hes paying 80% more which the bank calculated on say otherwise 10 yrs interest. OR would you consider someone buying a product from somewhere for price x and selling it elsewhere for price x + y Riba too? I hope not for that would then destroy all kinds of business. If Riba had anything to do with busniness conduct why is GOD contrasting it with charity? People whor doing business are sure not in need of charity. Poor people need things, they dont open up businesses and they shouldnt. GOD Bless!
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Peace "mazhar"
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.
JK- Again your forc?ng very far fetched interpretations on Riba and just causing more confusion. From the Quran it should be clear by the contrast of Riba with Charity that Riba has NOTHING to do with business conduct at all. Infact MShaikh's understanding is very good. Go and see his lecture where he explains that Riba is when one withholds the charity from the poor and it keeps on increasing with him. GOD Bless!
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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.
JK- Again you?re forcing very far fetched interpretations on Riba and just causing more confusion. From the Quran it should be clear by the contrast of Riba with Charity that Riba has NOTHING to do with business conduct at all. In fact MShaikh's understanding is very good. Go and see his lecture where he explains that Riba is when one withholds the charity from the poor and it keeps on increasing with him. GOD Bless!
JK- BAIH does not just mean selling but business in general which includes buying and selling. JK- BAIH does not just mean selling but business in general which includes buying and selling. JK- BAIH does not just mean selling but business in general which includes buying and selling.
is not just buying and selling. It is a PECULIAR commercial activity wherein the person who takes the possession of the goods, belonging to another man, on the promise of making the payment in the future after expiry of agreed period of time. And in such cases the obligation is much higher than another person obtaining/buying the same goods on cash payment. First one is a contract reaching maturity in the future. Therefore it MUST be reduced to writing in the presence of witnesses.
O you who say to have believed! When you people enter into a commercial deal of promissory nature for a period with specific terminating point in time for payment, then you must put it in writing and a scribe must amongst you write down in just manner;
and the scribe must not refuse to write down since Allah has taught him, therefore, he must write down and the party under liability should dictate remaining mindful/ fearful of Allah and should not reduce anything of liability/obligation.For reason of the indebted person being immature or is weak or is not capable to dictate, then let the guardian of his interests dictate it with equity;
and you let two men from among your men be witness , for reason of non availability, then any one man and two women, by mutual choice, be made witness;
so that if one gets perplexed/unmindful while recording witness the other may remind her . And when witnesses are asked to witness/testify the contract/in court they should not refuse. And you people do not neglect to reduce to writing your promissory commercial transaction for a specified term, whether it be big or small. Allah considers this more just for you, and for witness it is primary evidence and reduces the chances of suspicions; there is exception to this injunction that you may not reduce to writing the cash transactions that you do daily on spot hand to hand; but in case of promissory commercial transactions you should make it witnessed. The scribe and the witnesses should not be harassed, if you do so, you shall be guilty of excess. And you should remain mindful of Allah; He gives you the knowledge of the right way for Allah has the knowledge of everything.
is different and distinct from other business activity, according to Quran.
And similarly our commerce with Allah is in the nature of . Allah is the other party Who has to pay back after a period of time.
Momin has given Him his person and wealth on promise of discharge of His obligation by giving Paradise. What type of business is this? This is
When we pay it is with Allah against promise of exorbitant profit, He .
Many Sheikhs incorrectly presume as antonym of . The comparison is regarding the real outcome of both two, which is opposite to apparent appearance. In the wealth is apparently increasing, while in it is reducing/ getting away. Profit and loss is determined at the end of the day.
Allah is telling the hidden/final result/truth about the gain and loss/balance sheet.
The comparison of the nature of is only with . -
Peace "mazhar",
The writing down of financial transactions takes place automatically and is also witnessedf by numerous people who operate the bank so it is practically a non issue for such. In case of private people making a transaction yes that would apply BUT NONE OF THIS has anything to do with Riba. Meaning if we didnt adhere to these witness commands it wouldnt mean that wer now consuming Riba. Riba has nothing to do with business. It is witholding charity which is a serious moral offense. GOD Bless! -
Peace again "mazhar",
As i understand you're putting forth the standard sunni/shia argument that wheneevr money is lent profit/loss must be taken into account. In other words a bank can only take profit on the borrowers profit if the borrower profits and must involve itself in the loss if the boroower incurrs a loss. This however is nonsense for then someone who rents out an appartment or a car would have to do the same. Would you agree that a car rental should only charge rent for the use of the car if the person renting it made a profit along his journey? Doesnt make sense does it? GOD Bless! -
Peace again "rami",
It is a like a surgeon doing an appendectomy once and getting money for every appendectomy afterwards without actually doing it.
JK- I can very easily counter this statement and show this can apply to entirely non rental issue. Consider a business man setting up a business so complex that lastly all work is done either 1) by machines alone or 2) by a combination of workers and machines the hierarchy too being perfectly managed by various managers. He now does nothing anymore and keeps on getting paid. No rental is involved. Is this Riba according to you? GOD Bless!
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Peace again "mazhar",
As i understand you're putting forth the standard sunni/shia argument that wheneevr money is lent profit/loss must be taken into account. In other words a bank can only take profit on the borrowers profit if the borrower profits and must involve itself in the loss if the boroower incurrs a loss. This however is nonsense for then someone who rents out an appartment or a car would have to do the same. Would you agree that a car rental should only charge rent for the use of the car if the person renting it made a profit along his journey? Doesnt make sense does it? GOD Bless!Brother which shia/sunni has said what I have stated in reply 23?
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Peace "mazhar",
From your post i deduced that you meant that a lender should only ask for his/her profit once the user has made a profit/loss using the loan, from your statement "Profit and loss is determined at the end of the day." If thats not what you meant please correct me. GOD Bless! -
Peace all,
Let me put in another way
-Bayee' is return on labor whether mental or physical where a person consumes energy and time to accomplish a target.
-Riba is a return on capital be it in any form.A currency is a representation of Labor or Physical effort. If you make your capital create the revenue for you, you are in actuality stealing the fruit of labor of another. So a Millionaire is almost always usurious as he can't put that much labor but he will make the capital work for him by taking the fruit of labor of others without him exerting effort. So the worker is actually working for the capitalist! A very clear human crime.
Peace,
Rami
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Peace "rami",
Peace all,
Let me put in another way
-Bayee' is return on labor whether mental or physical where a person consumes energy and time to accomplish a target.
-Riba is a return on capital be it in any form.A currency is a representation of Labor or Physical effort. If you make your capital create the revenue for you, you are in actuality stealing the fruit of labor of another. So a Millionaire is almost always usurious as he can't put that much labor but he will make the capital work for him by taking the fruit of labor of others without him exerting effort. So the worker is actually working for the capitalist! A very clear human crime.
Peace,
Rami
JK- NO to get to the point where interest can be charged can require alot of labor depending on the situation and how much adveretisment is needed, etc. And since when is capitalism considered Riba? I gave you a very simple example of a businessman setting up a complex business where he himself no longer needs to put in any labor whatsoever and yet keeps on receiving money. Is that Riba according to you? As for currency it not merely represents labor but all goods collectively. GOD Bless!
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Peace "rami",
JK- NO to get to the point where interest can be charged can require alot of labor depending on the situation and how much adveretisment is needed, etc. And since when is capitalism considered Riba? I gave you a very simple example of a businessman setting up a complex business where he himself no longer needs to put in any labor whatsoever and yet keeps on receiving money. Is that Riba according to you? As for currency it not merely represents labor but all goods collectively. GOD Bless!
Sorry friend, it is the truth. All non-destructible working capital is Riba. That is the only way to get incredibly rich. Thats why the workers are always average but the investors are almost always rich. Simple maths. You are arguing because you are afraid to realize is that God and the modern world are on different poles.
Peace,
Rami
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Peace "mazhar",
From your post i deduced that you meant that a lender should only ask for his/her profit once the user has made a profit/loss using the loan, from your statement "Profit and loss is determined at the end of the day." If thats not what you meant please correct me. GOD Bless!Assalamo Alaikum,
The worldly life is for an appointed period of time. The sum total of acts done by each is "what he earned". In business parlance we call it balance sheet, which is prepared at the end of the financial year . In physical goods/products/commodities are given to the other party on the promise of payment of its cost/price in the future, hence value determined is much higher than it exists on the point of time these goods are being handed over. This phenomenon is equated by some people to be exactly equivalent to . In both, the gain is of capital, in unusual higher percentage. Allah, without giving explanation or assigning any reasons, straight tells His command that He declared Hilal and Haram. In the first case goods exchange hand and in the other only capital/cash/money is given to the needy to be returned with additional amount at certain percentage. General instructions about capital is illustrated by the Root " Nafq", it should remain flowing/invested in goods and commodities. If the blocked capital of only hundreds of people in the world is floated in the market, it may bring down prices of essential commodities to the reach of every man and provide jobs to all the jobless the world over. Millions and millions are below poverty line only because of withholding of capital for vested interest and keeping monoply and hold of the upper classes which is now a universal fraternity/mafia, notwithstanding apparently belonging to different religions. But they all have a common religion and interest and brotherhood.
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Peace "Rami",
Sorry friend, it is the truth. All non-destructible working capital is Riba. That is the only way to get incredibly rich. Thats why the workers are always average but the investors are almost always rich. Simple maths. You are arguing because you are afraid to realize is that God and the modern world are on different poles.
Peace,
Rami
JK- I guess then the once Prophet Solomon was consuming Riiba too. I can point out why your arguemnt doesnt make sense. Conmsider two doctors in two different places. one gets paid more than the other. I might consider that both are doing exactly the same work. Another person would argue that the doctor being paid more actually works less. Yet another third party argues that infact both doctors are receving too much. Can Riba be pinned down on what the majority agrees on is what a particular worker/laborer deserves? NO, it doesnt make any sense because money IS ULTIMATELY BTW TWO PARTIES and is of no others concern. Someone may like doctor x more and hence he/shed get more money as compared to doctor y. It's totally individualistic and out of this capitalism gets formed automatically. HOWEVER what one can argue is that certain essential products for life e.g. oxygen, water, corn and some others should have a price so that everyone can attain them. Besides that it' shld all be free market. GOD Bless!
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Peace "mazhar",
Assalamo Alaikum,
The worldly life is for an appointed period of time. The sum total of acts done by each is "what he earned". In business parlance we call it balance sheet, which is prepared at the end of the financial year . In physical goods/products/commodities are given to the other party on the promise of payment of its cost/price in the future, hence value determined is much higher than it exists on the point of time these goods are being handed over. This phenomenon is equated by some people to be exactly equivalent to . In both, the gain is of capital, in unusual higher percentage. Allah, without giving explanation or assigning any reasons, straight tells His command that He declared Hilal and Haram. In the first case goods exchange hand and in the other only capital/cash/money is given to the needy to be returned with additional amount at certain percentage. General instructions about capital is illustrated by the Root " Nafq", it should remain flowing/invested in goods and commodities. If the blocked capital of only hundreds of people in the world is floated in the market, it may bring down prices of essential commodities to the reach of every man and provide jobs to all the jobless the world over. Millions and millions are below poverty line only because of withholding of capital for vested interest and keeping monoply and hold of the upper classes which is now a universal fraternity/mafia, notwithstanding apparently belonging to different religions. But they all have a common religion and interest and brotherhood.
JK- Lemme first ask you two questions to get your understanding of Riba more clearly
- Do you consider lending a currency at a predefined rate Riba?
- Do you consider putting up cars/appartments for rent at a predefined rate Riba?
Now Im going to mention the same to you as i did to "rami". With the exception of essential products for human life like basic clothing, water, oxygen, corn and some others AL OTHER PRODUCTS SHLD BE FREELY MARKETABLE which means it doesnt matter how high the prices of those go. It's luxury and to get luxury im sorry to say you need the acceptance of other people. If your famous youre more likely to get them than if your not and there is no way around this. We cant force distributing luxurious goods amongst all people whom we consider are hard workers because even whos a hard worker and whos not is relative in so many cases. GOD Bless!
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Salaam,
Dear brothers the question asked is "what kind of Riba is prohibited in Quran"?
For this we have to refer to the Quran first
By going through the nine Quranic verses (2275-280, 3130, 4161, 3039) about riba, one sees that they prohibit riba in very strong language, but do not define it.
But the general understanding which one can assume is of that which the author ofthis thread has understood and posted in his first post.Many of us here donot believe in Ahadith, but we can use them as source of understanding the matters that existed at that time. As the most of complcations surrounding this riba problem is due to Ahadith.
That the ahadith reliably coming from the Holy Prophet did not explicitly define or clarify the concept of riba is also supported by a saying attributed to Umar
?Indeed the last of what was revealed in the Qur`an is the ayah of al-riba and indeed the Messenger did not explain it before he died.?
This may not be an authentic saying of ?Umar, but it, nevertheless, shows an early perception among Muslims that the Holy Prophet had not explained the meaning of riba before his departure from this world.
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But the question is does the Quran not explains Riba in detail, Is it possible? Yes! Quran does it at some other places too where people of that time are familar with the "terms" used.
Riba is every kind of interest is a conclusion derived by AHadith and man made Shriah and not from the Quran.
Therefore as the man of today is more advanced in technology and techniocal skills then the man of 1300 years ago, and the needs of man of today are different from the man of 1300 years ago, we must arrive at the exact menaing of Riba what Quran meant because it is only Quran the words of which are considered to be eternal. -
We shall also consider the punishments announced for taking "riba"
The punishment (burning in the fire in hell) for usury is mentioned in Surah # 2 Al-Baqarah - verse 275
after the verses advising charity and spending in the way of Allah. In verse 276, it is shown that Allah has blighted usury and made alms giving fruitful. Verses 278 & 279 order giving up what remains from usury or else have war with Allah and his messenger.
A painful doom is indicated in the verse 161 of Surah # 4 Al Nisa for those who take usury as also those who devour people's wealth by false pretenses.
In Surah # 30 Ar Rum - verse 39, it is indicated that charity is rewarding manifold and usury has no actual increase.We shall consider that such harsh punishments are awarded at which places in Quran?
Is it for some one who wants to gain profit on his business or for some one who is taking advantage of poors and needy?
The major question is if we consider Riba all kind of interest than the present banking system fails? and if it fails what are the consequences?
Do we have other alternative system? if Yes! please discuss it, aside from just using arabic terms for english terms such Mudaraba, Murabaha, Gharar etc. -
Peace "rajah",
Exactly Riba has to dfo with exploting the poor and needy nothing to do with busniess conduct. The hadith is absoltely ridiculous. Actually the mullahs have only claimed lending of a currency as Riba because it is BACKED BY GOLD AMONG OTHER THINGS and in hadith we find the Prophet Muhammad supposedly prohibiting any rental on gold claiming it to be riiba. It cant get any more absurd than that. GOD Bless! -
Salaam,
to understand Usury you must first understand ownership, without this it is impossible to grasp correctly, nothing can ever truly be owned by any human being, a fleeting spark (a person) can only be the custodian of anything, things are used for a short time, things are consumed, things are exploited, or things are invented, but ultimately all things are ephemeral.
To horde fiat money, gold, silver, sheep or whatever beyond any purpose or benefit, is at the detriment of those around you. You maybe the richest person in the grave yard, but not one coin, not one property, not one atom goes beyond this world and into the next, you leave this world with everything you held, owned or stole; lost?
Only those things of the mind are intermediaries, thought remains, the things of thought do not.
All things go back to the Earth, all things are allodial, to think otherwise is only the confusion of a subjugated mind.
To understand allodial ownership please read http//servantofthelight.com/content/view/68/98/
(Usury the premeditated theft of the fruits of somebody else?s labour.)
Many are confused as to what usury is, and what usury is not, but it is a very simple concept only confused by one thing, the desire to gain from usury while wishing to remain a Muslim.
All the Earth is allodial, as are the fruits of the Earth, for example if I plant a field of watermelons, the watermelons are the bounty of Allah, grown from the earth and out of the seed, and from the design of Allah, but the physical labour you invested in the planting of the seed, the preparing of the land, the harvesting and marketing of the watermelons, is what you have honestly earned and deserve in reward of your labour, so when you sell the watermelon, the watermelon itself is free, as it is the bounty of Allah, but the labour it took to reach its end user and consumer must be paid by the end user and consumer.
This is in contrast to usury, if I lent you a watermelon, and expect you to repay me two watermelons in return, I have laboured in the creation of the one watermelon, but I expect a second watermelon in return for no labour, I have extorted the fruits of your labour from you, because to create the second watermelon I must labour twice as much as you laboured in the creation of just one watermelon, and surrender that labour to you in reward for no effort on your part, this is usury.
Or if I demanded 10% of your crop in exchange for insuring it against loss, so I gambled you would have a good harvest, when the odds maybe only 1% of the time a crop is lost. This is a form of usury.
The Islamic model, protecting yourself from the hardship of a crop failure is simple. A group of farmers would join together, each committing a share of their crop into the collective pot, proportionate to the size of their holdings, only if a farm failed would any burden be extracted from the collective, otherwise the insurance would cost nothing. This loss burden sharing insurance could be linked across large group collectives of farmers, so reducing the burden through scale of any potential losses.
To sell a crop of watermelons at a discounted price before you have planted the seeds, and harvested, jumping straight to market, as is now commonly practiced through the futures market, is selling something you do not have, and may never have, you may only sell what you posses, to sell a potential is a form of usury, you are selling nothing now for the fruits of someone?s labour, for a price that if you deliver in the future would be for less than you have earned.
These principles can be applied to any area of commerce, for example if you sign a contract to pay a set fee for a service, irrelevant to whether that service is used or not, say a gym membership contract, but never go, yet you can not escape the contract period, this is a futures contract and a form of usury, any contract based on potential future use of service, as opposed to actual use is again not full measure for the fruits of your labour, so usury.