EBB 10303|ISLAMIC ECONOMICS

“THE PROHIBITION OF RIBA IN THE MUSLIM COUNTRIES”

STUDENT NAME ID NUMBER

NORDIYANA BINTI SHOKIF 62211215051

NUR HANIM BINTI MAHADZIR 62211114553

MUHAMMAD HANIF BIN SAHUL HAMID 62211114615

WAN MUHAMMAD FARED BIN WAN AIZHAM 62214215248

SHAIK ISMETH BAQIR BIN SHAIK BADUSHA 62211114532

INTRODUCTION

Riba -Arabic word:Raba -Bring several of meanings i. expand (Al-Nuwuw) ii.increase (Al-Irtifa)iii.grow ( Al-uluw) iv.excess (Al-Ziyadah)-Literally: additional value -Sharia: - premium - paid by the borrower to the lender along

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TYPES OF RIBA

Riba Al Fadl• *exchange surplus(barter)

Riba Nasiah• *arises in loan transactions (on the basis of

future repayment of more than the principal) as well as sale transactions (on the basis of deferred price).

HARAMi) Already mention in the Quran-Holy Qur’an in verse 2:275

با  م الر ه البيع وحر وأحل الل   �“Allah has permitted trade and has

forbidden riba”.•ii) Become a burden to any individual who are involve in this prohibited element•iii) Increased the amount of debt•Iv) Suffer depression

PROBLEM STATEMENT

Greed & Selfishnessi. Gap between the rich & the poorii. Encourage monopolyiii. Gives harm to peopleiv. Wealthy people must pay zakat and giving

charity

Effect Economy Growth•Inflation•Bankruptcy•According to al-Qaradawi: “The strict prohibition of interest in Islam is a result of its deep concern for the moral, social and economic welfare of mankind”•Limited needs & wants

OBJECTIVE OF STUDY

To examine the prohibition of riba in Muslim countries

To propose Muslim countries which are free from riba

To investigate the effect to the economic because of element Riba

PROHIBITION OF RIBA IN AL-QURAN

05/03/23

• Compare riba with Zakat• Praising Zakat, but not Riba

• Attaching the practice of Riba with the Jews• Consider the practice as an injustice

• Prohibition the practice of charging double & multiple riba

• Conclusively prohibiting all forms of riba• Any excess over the capital is disallowed

RIBA IN THE SUNNAH

05/03/23

“From Jabir b. Abdullah said: The Prophet

cursed the receiver and the payer of riba’,

the one who records it and the two

witnesses to the transaction: they are a like

in guilt”

MISCONCEPTION OF RIBA

1. Modern day interest is not riba

Argument: Interest is based on the premise “money is a

commodity”

2. There is no differences between interest and profit

Argument: Bank interest resembles profit in

Murabaha

3. Riba is allowed under Dharura (Necessity)

Argument: Under Dharura, the haram is permissible.

REASON FOR PROHIBITION OF RIBA

Riba will corrupt the society• Happens due to people who has right & power

Riba cause injustice and exploitation• Problems due to the greed & selfishness parties

Ultimate effect to the negative growth of economic

Clear burden on the borrower

• Cause negative effect on production & inflation• Eg: Greece

• Obliged to repay the principle and interest charge

ALTERNATIVE SOLUTION OF RIBA

Giving/Organizing a Qard al-Hassan loan.

Developing an Islamic Banking in the country

Apply the Islamic Economic System

CONCLUSION

Impact of riba

increase the rate crime

Increase gap

between rich and

poor

Economic inflation

• Totally prohibited by Allah because Riba’ will give harms to the people

large• Implemented many banks that inline

with shariah compliance which is Islamic bank.

• Change the Bay Inah contract to Tawarruq contract

• We should strongly avoided and rejected it from practicing on our daily

lives.