To present prohibition of Riba in Islam in

the back drop of financial compulsions of

modern world

Introduction

Aim

Background

Financial Cycle vs Belief

Riba as per Quran and Hadith

Comparative State

Q&A Session

Conclusion

• During pre-Islamic era, it was customary to borrow gold, silver, metals, live stocks and item of food to fulfill the requirement of a needy person

• However, in accordance with the deal, if the borrower fails to return the items he borrowed at the preset time, or

• In case of default; the lender often used to increasing the amount out of proportion, charging double or multiple time of the original amount according his own discretion

• Borrower had no say in it and there was nothing to control this trend which is basically an exploitation of the situation to weaken or destroy the borrower.

• As Muslims were also part of the society, they had to deal with the same prevailing trend.

• To address this trend, Allah, had sent a few revelations (30:39, 4:161, 3:130-2, 2:275-8 etc) and advised Muslim Ummah to refrain from Riba.

• Quranic verses relevant to riba and prophet’s saying on this subject of riba came during the last phase of prophet’s life.

• Hence we don’t have enough explanation of riba and its scope, depth or implications on Muslims Economical and Financial System.

• Consequently Muslims around the world are confused and polarized on the subject of Riba as compared to interest in modern day banking system.

• This uncertainty, surfaced due to the vagueness in the definition of riba and its rules.

• Even, Linguistic explanation of riba does not cover explicitly its scope as any legitimate increase of profit is also an increase.

• Hence riba falls with in the subjects of interpretation and needs to be addressed in order to avoid clash with Quranic verses.

Riba and Interest Equation• Through out the history of Islam many scholars,

intellectuals & Muslim jurists have tried to address this issue and provided their opinion about riba.

• Based on Quranic verses and Prophetic hadith, majority of jurists concluded that riba is forbidden

• But they did not come explicitly clear in equating riba to interest and in declaring that interest is the same as riba, hence not allowed.

• General consensus (Ijma) among Muslim Scholars equating Riba to Banking Interest, is still questionable due to vagueness in the definition of riba and it requires Ijtihad to resolve this issue.

Option to Riba and Interest• During last few decades some scholars came up with the

idea of Islamic Banking. • In reality there is no such thing like Islamic or Non-Islamic

banking. • It is more or less the same as western banking system

except that we have changed the name and modified few parameters to make it look justifiable.

Insecure environment

Uncertainty and difficult life styles

Living standards beyond capabilities

Bank deposits and banking system

Profit dreams and bank lifeline

Receiving and paying Riba

Signs of Judgment Day

10 m

12,000

10 m / 12 m deal

Loan

Loan Return @ 15%Profit @ 15%

12 millionProfit @ 15%

12 m – 1 m

Year BBF Subs Annual State Interest Total

0 0 12000 12000 1800 13800

1st Yr Svc 13800 12000 25800 3870 29670

2nd Yr Svc 29670 12000 41670 6251 47921

3rd Yr Svc 47921 12000 59921 8988 68909

4th Yr Svc 68909 12000 80910 12136 93046

5th Yr Svc 93406 12000 105046 13800 118846

6th Yr Svc 118846 12000 130846 19627 150473

7th Yr Svc 150473 12000 163473 24371 187844

8th Yr Svc 187844 12000 199844 29977 229821

9th Yr Svc 229821 12000 241821 36273 278094

10th Yr Svc 278094 12000 290094 43514 333608

Total 132000 203408 333608

Ms. Naik Bibi

10 yrs service

Actual deposits : 132,000

Current balance : 333,608

Total profit : 203,408

Profit in % : 65 %

QURAN vs. 10 Yrs’ Riba

Total profit : 203,408

Profit in % : 65 %

IMPORTANT WEBSITES

• www.harunyahya.com• http://www.alquranic.com • http://www.inter-islam.org/faith/Majorsigns.html• http://etori.tripod.com/dajjalsystem/judgement.html • http://www.alquranic.com/topsites.html• http://tanzil.net/#1:2• http://www.biharanjuman.org/Quran/quran.html