Riba as I understand
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But Riba is not just limited to currecies. Say in a small village where there all shops are closed but some ppl r hungry. Some crook comes along and sells the necessary food items for them at 200% increased price. THT TOO IS RIBA but apparently the sunnis forgot abt tht. GOD Bless!
Jonnny ! you make an important point here.
siki
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Peace yusha
Whoever He has forsaken, it is because they have forsaken Him And be ye not like those who forgot Allah. and He made them forget their own souls! Such are the rebellious transgressors! (Al-Hashr 5919)
Its is whoever, person related, nothing to do with location.
lk
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Quote from jonny_k on Yesterday at 072426 PM
But Riba is not just limited to currecies. Say in a small village where there all shops are closed but some ppl r hungry. Some crook comes along and sells the necessary food items for them at 200% increased price. THT TOO IS RIBA but apparently the sunnis forgot abt tht. GOD Bless!Jonnny ! you make an important point here.
siki
If someone sells an item at 200% increased price that is NOT "riba". It is still a fixed price the item is being sold for. There is a difference between trade and "riba".
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If someone sells an item at 200% increased price that is NOT "riba". It is still a fixed price the item is being sold for. There is a difference between trade and "riba".
It's not riba, it's injustice, and malice.
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Peace bro "Wakas",
If someone sells an item at 200% increased price that is NOT "riba". It is still a fixed price the item is being sold for. There is a difference between trade and "riba".
JK- No man now your equating trade with Riba(out of bounds trading). This is exactly the problem. Yes people do call this trading and thexy boldly speak of free marketing. However the scitnfiic community checks ppls needs and sets the upper bounds for prices for certain necessary products and if you vilate them your not trading justly, your engaing in a form of Riba. Who on earth gave you this idea of fixed non fixed prices? I can bet it was the sunnis. Well lemme tell you something everything is fixed according to mathematical formulas and asnyone who understands them will know the amount to be paid aforetime. Btw if the person at any time shows the bank tht he can no longer pay then he can go to certain institutuions and they will regard him is inable. Then he may even be forgiven the debts totally. Yes but for tht the indidual has to come to the bank and explain his situation. The baks cant run after millions of customers. GOD Bless!
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peace,
However the scitnfiic community checks ppls needs and sets the upper bounds for prices for certain necessary products...
Please provide evidence for this alleged process.
...and if you vilate them your not trading justly,
I am not debating whether it is just or not, we are discussing what is "riba".
your engaing in a form of Riba.
Quranic evidence?
Who on earth gave you this idea of fixed non fixed prices? I can bet it was the sunnis.
Its possible. I do not claim to have overcome my traditional Sunni upbringing entirely, however I did not see you provide any Quranic evidence for your claims.
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Isn't it still interest though? You are still paying for something that wasn't part of the amount loaned? If someone lent me money and said I need to pay him back double then that is not interest because as you pay him back the amount gets smaller. Even if the interest isn't compounded there is still the possibility of being trapped forever paying someone back.
One can look at it as a dollar amount or a percentage. In the earlier case, if a fixed one time dollar amount of $100 is charged on a $1,000 loan to be paid in 1 year, it is a 10% annual simple interest (100/1000 x 100). Whether the charge is double or not, it can be seen either as a dollar amount ($) or a percent interest (%). How the charge is applied over a given term determines whether its a Simple or Compound Interest. Sometimes a fixed higher price includes a service or luxury charge among others, as seen in theaters or specialty entertainment parks where the price of a candy bar, coke or a bucket of popcorn is quite high, for example.General To understand a mortgage loan is not simple at all but here's a quick short overview. In a mortgage, there are essentially 3 types of interest charged loans Fixed, Adjustable (also called ARMs or Option ARMs) and Hybrid (adjustable + fixed), each of which come in varieties of options to accommodate individual's needs relevant to their specific criteria. The most "affordable" yet the riskiest of the three, is the ARM and the most beneficial over the life of the loan is the Fixed. Hybrids are somewhat similar to Fixed in the initial stages and excellent for shorter keeps.
The interest rates are based on Index (LIBOR) plus Margin (banks profit). Index fluctuates on a daily basis and not only depends upon LIBOR but also the Treasury and Savings & Loans economic financial factors. They are standard and sometimes remain "steady". The margins vary from lender to lender and are also dictated by their guidelines directly in synch with borrower's criteria. In short, Index plus Margin = Interest Rate, which then determines the annual percentage rate (APR) inclusive of other fees and charges. There's not a loan, at least that I know of, where principal is paid first and then the interest but the other way around, as is the case with ARMs. Individual's criteria, i.e. credit history, FICO score, income status, assets, employment history, down payment, closing costs, etc., dictates the individual's strenghts to borrow the amount and the type of loan on a home they may be elligible for, including negotiated conditions as agreed and signed by both the borrower and seller.
In general, there will always remain the fact that there are various types of mortgages, variious types of homes in various types of locations for various types of individuals including various types of government subsidized loans for the low income and the needy.
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It is true that the process to determine interest rates does try to take into consideration many factors... But it still sounds like interest. If someone can explain to me what is the difference between banking interest and the interest prohibited by God then that would be great.
Peace
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Peace bro "Wakas",
peace,
Please provide evidence for this alleged process.
JK- How many times does the Quran ask us to ponder, thus promoting the scientifc method? You need to do this each and everywhere otherwise youll end up with biased interpretations like the sunnis did.
I am not debating whether it is just or not, we are discussing what is "riba".
Quranic evidence?JK- "Riba" means an "INCREASE" and there you have it. Thus an increase in the set price which would be the upper bounadary and more than tht wld exploit ppls needs. Fits perfectly.
Its possible. I do not claim to have overcome my traditional Sunni upbringing entirely, however I did not see you provide any Quranic evidence for your claims.
JK- Yes indeed same was the prob with me too but wed have to get over it. GOD Bless!
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peace jk,
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You jump from 'al quran' asking us to ponder and thus promoting the scientific method to there are well established upper price boundaries when selling items and going out with these is "riba"? This is not what I call "Quranic evidence", in fact, nowhere near it.
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You go from "riba" means "increase" to "riba" means an increase in the set price which would be the upper bounadary and more than that would exploit ppls needs... and states this fits perfectly? This is not what I call "Quranic evidence", in fact, nowhere near it.
JK- Yes indeed same was the prob with me too but wed have to get over it.
Thanks for the advice. I have some for you too... you can often tell when someone has a poor argument or position in a discussion, and one way to tell is when they make points not based on the topic but about the author.
Lets stick to an evidence-based discussion.
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If someone sells an item at 200% increased price that is NOT "riba". It is still a fixed price the item is being sold for. There is a difference between trade and "riba".
Wakas
Agreed, actually i was just trying to make a point, that there are other paractices which are/could be as bad , and yet we ignore them.
siki
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Peace all,
I respectfully disagree with brother Wakas's view that simple interest is not riba, and agree with brother Latif's understanding on this issue.
The whole paper money system is corrupted and the practice of the government to print more paper money which is not backed by anything of real value such as gold or silver, causes dilution of the paper money in circulation leading to loss of its value or buying power which is called inflation.
Please see the following videos which explain this corrupted paper money system
http//video.google.com/videoplay?docid=-9050474362583451279
http//www.youtube.com/watch?v=m2pxW7D1Vao
You will see how the interest, even when it is simple interest, is an important ingredient of this corrupted banking system and contributes to its destructive power. Only that amount of extra paper money is generated out of thin air which is equal to the new loans, and is not backed by anything of real value such as gold or silver, hence there is no extra money in existence to pay the interest being charged on those loans, and at the same time leads to inflation.
In this corrupted paper money system, if I lend money to someone, I would like to get the original amount back whenever the borrower returns my money, so I think it is ok to ask the borrower to return enough extra paper money to compensate for the inflation, because then there is NO GROWTH/INCREASE of the money; but to charge the borrower simple interest in an amount greater than the rate of inflation would be riba in my understanding as there will be growth/increase of the money, and thus forbidden.
For example, since 1913, a dollar has lost its value so much due to inflation that it is worth 4 cents now, and thus 2500 dollars of current paper money would have the same buying power as 100 dollars in 1913. So hypothetically speaking, if someone had borrowed 100 dollars in 1913, and if one wished to pay off that loan, one will need to pay 2500 dollars to the lender to compensate for the inflation, without any growth/increase.
Similarly, if I lend 1000 dollars to someone, I can write an agreement with the borrower to return the money in a certain amount of time and to pay me extra money at that time to compensate for the inflation during that period of time. If the borrower defaults on time, as long as I am paid back extra amount of money along with my original amount to compensate for the inflation during the full period of time of the loan, I am ok with that. For example, if I lent the money for 1 year, and the inflation during that period of time was 3 %, the borrower would need to pay back 1030 dollars. Instead, if I had charged 10 % interest for that period of time, and I had been paid back 1100 dollars, then 70 dollars would be riba.
If, however, the monetary system is revamped and is based on 100 % gold standard, then there would be no inflation and then no extra money will be due on returning the loan, to compensate for inflation. If the borrower is unable to pay the loan back due to genuine reasons, then the loan should be given up as charity.
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Peace "wakas",
peace jk,
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You jump from 'al quran' asking us to ponder and thus promoting the scientific method to there are well established upper price boundaries when selling items and going out with these is "riba"? This is not what I call "Quranic evidence", in fact, nowhere near it.
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You go from "riba" means "increase" to "riba" means an increase in the set price which would be the upper bounadary and more than that would exploit ppls needs... and states this fits perfectly? This is not what I call "Quranic evidence", in fact, nowhere near it.
JK- Well IMO and from my understanding of the Quran it incldues tht as well and yes also if you take AN INCREASED AMOUNT OF INTEREST WHICH COMPOUNDED OVER AND OVER IS EXTREME tht too wld be "Riba" but nowhere is interest itself Riba. GOD Bless!
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peace brother Tanveer, all,
Lets say ANY/ALL increase above the rate of inflation is considered "riba", what do you make of 3130 and 3039 which both imply it is about "increasing/swelling/growing/rising", i.e. not static?
That is why I feel having a fixed repayment, agreed by the loan-taker, is not "riba". However, I do agree that in the present currency system that only asking for the original sum + inflation is the most righteous.
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Peace "wakas",
peace brother Tanveer, all,
Lets say ANY/ALL increase above the rate of inflation is considered "riba", what do you make of 3130 and 3039 which both imply it is about "increasing/swelling/growing/rising", i.e. not static?
JK- 3130 makes clear the fact tht a high %age of interest which is Riba can be devastating if compounden over and over. It doesnt say tht the compouning itself is Riba there. 3039 makes this clear also. Doesnt mean compound interest itself is Riba. Moreover by your definition od increase how come you defend simple interest. Doesnt tht add every year too? Ok it adds less but it does so there is an increase its only a linear increase.
That is why I feel having a fixed repayment, agreed by the loan-taker, is not "riba". However, I do agree that in the present currency system that only asking for the original sum + inflation is the most righteous.
JK- And then how would the lender profit? Remeebr wer not talking about charity here. The banks are not charity organizations per se. When somebody gives charity then its different he doesnt charge any interest nor does he necessarily ask for any return at all. Here wer talking abt when ppl wanna get into business and take loan. Why should i make them rich freely and lend them any currency? Doesnt make any sense. GOD Bless!
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Jonny_K, the supposed return on a loan is non-existant, because when you make a loan with ANY interest, as said by Tanveer, inflation occurs (if someone does not work their ass off for the value of the interest). If the "economy" consisted of only person A and B, and they made a loan, and person B could print off a few extra notes as "interest", you would notice person A has no return whatsoever on their loan. The only reason this isn't evident here is because the economy is stupidly huge (and corrupt in complex ways).
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Peace "OPF"
Jonny_K, the supposed return on a loan is non-existant, because when you make a loan with ANY interest, as said by Tanveer, inflation occurs (if someone does not work their ass off for the value of the interest). If the "economy" consisted of only person A and B, and they made a loan, and person B could print off a few extra notes as "interest", you would notice person A has no return whatsoever on their loan. The only reason this isn't evident here is because the economy is stupidly huge (and corrupt in complex ways).
JK- So that means when i rent out an appartment for a return the rent is non-existant, not for the first month but the next coming ones for there needs to be a contract of at least x months? Doesnt make any sense. First of all one only gets a loan if he 1) has propert which amounts to more value than the loan taken(so the money does exist) 2) he has job contract which is fixed and safe enough for the bank to lend the money out in advance. Here youll get the money if you keep working and dont quit your job yourself. GOD Bless!
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The return is non-existant if the goods aren't there to back it up, yes. You don't notice this on rent because the rate at which rent is paid is usually not as exorbitantly high as the rates of interest, nor is it as common.
Again, imagine it's Person A and Person B. Person A sells X, person B sells Y. Person A rents out his house to B. B prints out money as rent to A. A uses the money to buy Y from B - but B has jacked up the prices to keep with inflation!
The only two ways to repay that is either human labour, or physical goods. Money implies the existance of either, but does not guarantee. With interest, money is increasing at a rate too high for the physical goods or human labour to keep up with - there's only so much oil on Earth.
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Peace "OPF"
The return is non-existant if the goods aren't there to back it up, yes. You don't notice this on rent because the rate at which rent is paid is usually not as exorbitantly high as the rates of interest, nor is it as common.
JK- And i told you before the bank gives you any loan it makes sure you have that value in currency to back it up like property and/or a fiyed job where youll eventually earn upto the loan. They aint stupid.
Again, imagine it's Person A and Person B. Person A sells X, person B sells Y. Person A rents out his house to B. B prints out money as rent to A. A uses the money to buy Y from B - but B has jacked up the prices to keep with inflation!
JK- If inflation occurs in property so as to decrease its value with repsect to tghe lended currency beyond a certain limit then the bank would be forced to sell your property and get their loan back unless you pay them back from the profit youve made so far. This is ofcourse the risk one has to be aware of in advance whilst taking loan on ones property and most good banks inform the customers of this.
The only two ways to repay that is either human labour, or physical goods. Money implies the existance of either, but does not guarantee. With interest, money is increasing at a rate too high for the physical goods or human labour to keep up with - there's only so much oil on Earth.
JK- You mean with compound interest? Well tht depends on how well the debter has calculated how to utilize the loan. 2ndly as i said the banks calculate in advance the situation of the person before they give out loan. And any further interest has to stop if the debter proves insolvency. In tht case the bank has to take the loss but they at least made sure tht the person him/herself does his best not to cause his business to fall and as such most ppl wld handle it with care and both they and the bank would benefit as a result. Once again the bank doesnt run after you, youve to run after it. GOD Bless!
