Friday 8 September 2017

Riba in Islamic Perspective
Author: Umar

Riba means the excessive fixing interest of loan which is imposed to the lender. Identically, people define usury as the interest from the bank which has the similar meaning to the interest. What makes it similar is because either rent or usury will generate the amount of interest which both are categorized unlawful (haram).
In practical, the interest of the bank is the profit which is proposed to the bank due to their set of services in providing money to the debtors in the term of a productive enterprise. Then the question comes up, what is the difference between the usury and the interest? To answer this question, the definition of interest should be embodied. Lexically, interest is the translation of the word interest meaning the percentage of money lent from a bank. Thus, it can be concluded that both usury and interest need extra reimbursement when the debtors return the money to the bank.
As in the Qur'an letter Al Baqarah verses 275 - 276, Allah SWT states that: "Those who eat (take) usury cannot stand but like the establishment of people who conceded devils because of the pressure of madness. Their situation is that is because they say, actually buying and selling is the same as usury, but Allah has justified the sale and purchase and forbid usury. Those who have reached to him the prohibition of his Lord, then continue to stop (from taking usury), then for him what he has taken first (before coming to ban); And its affairs (up to) to God. The one who returns (taking usury), then that person is the inhabitants of hell; They will abide therein (275). Allah destroys usury and fosters alms. And Allah dislikes every man who abides in unbelief, and always sins (276). "
In the verse, Allah affirms that He forbids usury to be a profit-seeking instrument in socioeconomic activity. However, Allah nourishes alms and justifies buying and selling as one way to gain wealth in a good way. Based on the above description, the Islamic view is very clear that the concept of usury is haram.
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