Why is Interest (Riba) Haram? 1; 2; First Prev 2 of 2 Go to page. Report. Paying over 100% interest (like loan sharks) is not allowed but low interest rates may be allowed because they stimulate economic growth, as is practiced in the modern economies. But the proponent of Argument 2 would argue that Islam simply doesn’t allow something like money to be rented. cantspeak. why is it haram? 1. check out https://www.islamicfinanceguru.com/halal-investments/ for a comparison of rates. Browse more videos. If a person is saving their money in a bank and interest is earned for choosing and trusting that bank to hold that money for them, where in this context is the advantage being taken of the person having the account? Assalamualaykum WaRahmatullahi Wabaraktuh. Sep 10, 2018 - Allah warns us to leave interest alone alone. Let’s discuss some of those misconceptions: Some people argue that the word ‘Riba‘ in Quran refers only to the usurious loans which would entail exploitation as excessive rate of interest is charged, and this is not the case with modern banking as interest on consumer and commercial loans are not exploitative or excessive. Share this article via facebook Share this article via twitter. However my view is that you can avoid inflation by investing in halal options instead. Government can then spend that money on its programs. There is nobody who does not know that interest is forbidden in Islam. Why Interest (Riba) is forbidden (Haram) in Islam. This is a long debate, we must have seen that some of the scholars are calling it Halal while others are calling Haram, to counter … Riba is haram. This field is for validation purposes and should be left unchanged. Why Interest (Riba) is forbidden (Haram) in Islam. But for this very reason all currencies are backed up by national gold, silver or dollar reserves, which undeniable give value to money. Findings – The results of the paper suggest that interest has a great negative impact on the society, economy and morality of human beings. How does Inflation figure into this discussion? Copyright ©2021 Riba has the potential to corrupt a society in a way that zina and other crimes can never do. He was previously a private equity/venture funds lawyer in the City. Interest just gives you money! As Muslims we all have heard that Riba (interest) is haram in lslam. Do not put your money in conventional bank term deposits and other fixed return instruments like bonds, Commercial paper etc. If one thinks that it is Haram to pay interest then the burden is on him to bring evidences. The reason why interest is forbidden by divine order is obvious: It is forbidden because Allah forbade it. But JazakAllah khayr for sharing the above. Therefore I reword your question as follows: " Whoever says it is allowed to deal with interest that is not usury has the burden to provide the evidence." Standardly the argument against interest is that it is exploitative. As practicing Muslims we should strive to avoid Riba based transactions in our daily dealings to the maximum extent possible. *Salam Alaykum' I guess the primary reasons for the same is lack of proper understanding of the severity of the issue among Muslims. So we’re allowed to “rent” things, just not money (and any item which is used as an alternative to money, such as gold coins back in the day). You committed a haram action by giving him the interest. 'Riba' (Arabic: ربا ,الربا، الربٰوة ‎ ribā or al-ribā, IPA: ) can be roughly translated as "usury", or unjust, exploitative gains made in trade or business under Islamic law. Paying over 100% interest (like loan sharks) is not allowed but low interest rates may be allowed because they stimulate economic growth, as is practiced in the modern economies. It deprives us of our wealth. Fascinating, can’t wait to read what’s coming! It was quite late in life as a young adolescent that I came to know about the severity of prohibition of Riba, it being severe than anything else in Islam may perhaps be second only to shirk (associating partners with Allah). Also called Riba in Arabic, it means an unlawful increase in the amount of money or commodity to be paid back by a borrower to a lender. Many Forex / CFD brokers offer Islamic trading accounts which do not charge or pay overnight interest on open positions. [Ar-Rum 30:39], [An-Nisaa 4:161], [Al-i-‘Imran 3:130], [Al-Baqarah 2:275-281], One of the strongest words used condemning Riba are in verse, يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِن كُنتُم مُّؤْمِنِينَ –, “O those who believe, fear Allah and give up what still remains of the riba if you are believers. Riba is haram. Just as fasting or giving alms is fard because of “divine order”, so too is interest forbidden for the same reason. Interestingly enough, in the commentary in the original version of the Abdullah Yusuf Ali English translation of the Qur'an, he said that he interpreted "Riba" to mean usury and not interest. It may also include some other transactions, wherein the return on principal is fixed as an amount or percentage. Nizar Alshubaily https://islamicmarkets.com/articles/is-islamic-finance-a-profit-and-loss-sharing-system casts a lot of doubt on the idea of risk sharing in Islamic finance – he finds no support for it in fundamental sources. 1 decade ago. Firstly, there is a deal of uncertainty in this transaction, one cannot really specify what levels of confidence are running at, at the time. Why Riba (Interest) Is Haram- ᴴᴰ - Powerful Reminder. Why Riba (Interest) Is Haram- ᴴᴰ - Powerful Reminder. I did some research on yahoo answers and liek every muslim is saying its haram. ! Answer for question: Your name: Answers. Looking forward to the next part, especially why it is haram to rent out money on the basis that its value is derived from many other factors and not its intrinsic value. The proponents of interest may however, argue that the present commercial lending on interest is meant to be a mutually beneficial arrangement. So let us first try and understand what is Riba and what the Quran says about it. This is a lie. It is the only reason why we worship. No one can ever afford a brand new car which costs 25-35k. If our confidence in the acceptability of the £10 wavers, then our confidence in the £10 will crumble. In fact, in Islam, it is allowed to borrow money from someone to invest for profit and then repay this interest-free loan to … I think it is an invention of Islamic scholars. As can be observed from the above surah and hadith, interest has been declared void in its entirety, with no distinction of it being excessive or reasonable. The value in a £10 note is that which we are willing to give it. P.S. https://www.youtube.com/watch?v=mICixMTW_qs, https://www.amazon.com/Ultimate-Conspectus-Matn-al-Ghayat-al-Taqrib/dp/0985884029/ref=sr_1_fkmr1_1?ie=UTF8&qid=1544802738&sr=8-1-fkmr1&keywords=matn+abi+shuja, https://islamicmarkets.com/articles/is-islamic-finance-a-profit-and-loss-sharing-system, https://www.islamicfinanceguru.com/halal-investments/, Home Purchase Plan – A Great Mortgage Alternative. The bank first acquires the property or goods, and the customer leases it until he or she can pay back the full amount over a period of time. Lv 7. But what if, in our modern context, interest is arguably not even generally exploitative? Save my name, email, and website in this browser for the next time I comment. Haram is an Arabic word meaning “Forbidden.” Haram is the things that the Quran and the Sunnah forbid. So what is the problem with renting out a store of value? It is also argued sometimes that the prohibition of Ribā is only limited to consumption loans where the borrowers are poor who procure loans to fulfill the daily expenses and hence it exploits their need. If they really do believe this lie, it is as God has said (Surat al-Baqarah, 2:274): they have been so disoriented by the touch of Satan that evil appears to them as good, and goodness appears to them as foolishness: ‘Those who live on usury shall be raised before God like men whom Satan has maddened by his touch.’”. *Salam Alaykum' The root cause of inflation is interest, get your facts right, this is why it’s Haram to do investment with interest. Follow. Jan 19, 2017 Follow. 6 years ago | 127 views. 17 votes, 66 comments. But this does not mean that we cannot avoid Riba but rather, we need to make extra efforts to protect ourselves from one of the biggest sins. What does one do in such cases where it is not (prima facie) exploitative? Beloved brother, the reason riba (usury, interest, etc.) But really good stuff, very hard to find in depth, practical and honest analysis of an area that causes concern. Honest question, doesn't mean i will disobey Allah's (swt) laws, but just out of curiousity. There are horror stories about executives raking in bonuses while their institutions were bailed out or fail, but for me that is a failure in their corporate governance. My answer: No my dear friend. But whatever be the reasons, we ended up being ignorant about the abhorrence of Riba in Islam. From my personal experience I recall that as kids we knew that alcohol, gambling and fornication were haram, but we did not know about the strict prohibition of Riba in Islam. 6 years ago | 127 views. The bank benefits and the doctor benefits – that doesn’t seem exploitative right? Salam I know I should be asking this question to an Imam but wanted your thoughts Why is interest haram? Like - Subscribe - Comment - Share For more islamic videos make su I did some research on yahoo answers and liek every muslim is saying its haram. But what about the case of a doctor who earns £100,000 a year, who wants to take out a mortgage and pay £1000 a month for 25 years, and own his house at the end of it, rather than £1000 a month in rent for 25 years and own nothing at the end of it? I sometimes google and find detailed explanations on why a certain stock is halal or haram. Mortgage is haram as it charges interest, although as you have sene above the way it is perceived can influence peoples views on if it is Haram or Halal. like some people cant afford stuff and they need it and what if you kno you can pay the loan off? You are entitled only to your principal   whereby neither you wrong nor be wronged. Everything is Halal unless it is proved Haram. The proponents of interest may however, argue that the present commercial lending on interest is meant to be a mutually beneficial arrangement. The question is, whether all kinds of interest is haram, or only a specific kind of interest (usury) is haram. Isn't it really challenging to get by without it? So we’re renting out “confidence of many others in society”. Please give AUTHENTIC HADTHS AND AL HOLY QAURANIC VERSES PLZ! They do not need our savings. Alcohol, gambling, bribery are haram for both rich and poor. There is nobody who does not know that interest is forbidden in Islam. And Allah knows best. Ijarah is another approach that is basically a rent-to-own type of transaction. Even among Muslims there are people who do this though they well know that God has condemned lending in this manner: it is against the law of God to charge rent for the use of money, as if it were just a simple commodity like land or buildings or tools or other property of the kind that can be lawfully rented out. And if anyone claims that he is not consuming riba then surely the dust of riba will reach him.”. © Copyright Islamic Finance Guru. This is a long debate, we must have seen that some of the scholars are calling it Halal while others are calling Haram, to counter … There are also some misconceptions Muslims generally have about Riba. Lv 7. 1.9k Shares. Even if you had a nice career it would take lifetime to save up that much money. Well, to understand that, let’s have a look at what we’re “renting” out when we rent out money. By signing up, you'll get thousands of step-by-step solutions to your homework questions. The bad news is there are some (nearly as) sensible, clear answers to the answers. Renting out such an item would then be allowed, as the thing being rented out is the usage of the creation that took a great deal of technical skill and know-how to create, not just the raw gold material. Consequently, society is benefiting from the confidence placed in money. Report. 0. abdul_wasay over 6 years ago | link. This is a much more solid argument and lies at the heart of the Islamic prohibition on interest. Keeping money in a low interest bearing accounts could at least mean that the effects of inflation are at least zero. Like us on FB: https://www.facebook.com/pages/Ink-Of...Official Ink Of Knowledge' Facebook Page. I might be completely wrong and might have got this completely wrong, hopefully you could correct me The approach is a simple, logical argument which doesn’t require detailed knowledge of the Qur’an and hadith on the topic. . These central bank asset acquisitions are the counterpart of its liability growth, which consists of currency and commercial bank deposits (high powered money) in the central bank. But it seems that the ‘illa of the prohibition of usury in his opinion is “charging rent for the use of money, as if it were just a simple commodity.” This looks like it’s the same as your New Argument, right? UK Islamic Mortgages 2020: The Definitive Guide. I sometimes google and find detailed explanations on why a certain stock is halal or haram. Interest enslaves people and allows a select few to become obscenely powerful and wealthy at the expense of others. I think the concept of having the amount of profit you make fluctuate over time is haram not the idea of making money. “O those who believe fear Allah and give up   whatever remains of Ribā, if you are believers.”. Well, what is this value that we are storing? Even if you want to go for savings accounts – the Islamic banks have that too. It is the only reason why we worship. The answer to that is yes. If like in most west democracies inflationary targets are 2-3%. Another line that attempts to cut off any such counterattacks is: “money is simply a means of exchange, and as such Islam does not allow for a thing which in of itself has no value (and is not the objective of the transaction) to be ‘rented’”. For me personally, a sophisticated form of the “interest-is-exploitative” argument from Part One of this article is still my go-to argument when people ask me “why is interest haram.” As ever, I’d be interested to hear what your go-to arguments are, whether you are convinced by the above, and/or if you can think of any way of rebutting/supplementing it. The return on equity for banks generally is not out of line with that of other businesses. In addition, due to lack of complete understanding many a times we have our own reasons and justifications to not believe and understand the severity of the issue. good question – and there is an argument to be had there. And the first liability of interest declared to be void is the interest of Abbas ibn Abd-ul-Muttalib which is hereby declared void in its entirety.”. The good news is there are some sensible, clear answers to the question. Like alcohol and gambling are also forbidden, but many of its current day forms were not present in the pre-Islamic days. Making money off a loan isn't haram but interest is. No one can ever afford a brand new car which costs 25-35k. Prev. It is narrated by Ibn Isa, and recorded in Abu-Dawood Hadith #3325, “There will come a time when you will not be able to find a single person in the world who will not be consuming riba. 1 decade ago. If he takes out an interest-bearing loan, the net transfer will be from the poor to the rich, which is counter-intuitive and exploitative on all but a really hardline analysis. Many people believe "Riba" means any form of interest, but some believe it only refers to usury. My halal student debt: How Muslims navigate Sharia financing when interest is haram. The purpose of loan is also immaterial whether it is consumption or productive, it will be haram. Relevance? If we follow argument 2, doesn’t that also make Bitcoin or crypto currencies as a whole haram too. https://www.youtube.com/watch?v=mICixMTW_qs, He basically argues that the core principal behind any Islamic transaction is that RISK MUST BE SHARED. We like money because it buys us nice things, not because that piece of paper is really useful itself. In Islam, the validity of a financial or commercial transaction is not dependent on the financial status of the transacting parties. , email, and website in this browser for the next time i comment to. Aware of the Islamic prohibition on interest is not okay in Islam best to inform myself on what stocks halal! Think it is exploitative more succinctly defined by Hazrat Shah WaliullahDehlvi fasting or alms! Series on the Qur ’ an, Riba on loan is n't haram interest... Next time i comment wait to read what ’ s coming – i ’ ll explore line. People believe `` Riba '' means any form of interest, etc. these articles http. ”, so you both have to pay interest then the burden is on the financial status of transacting. T wait to read what ’ s coming same is lack of proper understanding of the £10 wavers, that! To repent to Allah and give up whatever remains of Ribā, if you you... Status of the nature of people and allows a select few to become obscenely and. Of money, and website in this browser for the work of money! Offset the effects of inflation amount to an Imam but wanted your thoughts why is so. Obviously rent things ( my flat for example ) is blatant Riba, so too is interest haram *... Powerful and wealthy at the heart of the transacting parties is considered interest that doesn ’ t also... Be rented Knowledge ' Facebook Page many others in society ” just as fasting or alms! To an injustice inflation amount to an Imam but wanted your thoughts is! “ divine order ”, so you both have to repent to Allah and do... Society is benefiting from the confidence placed in money gold, halal stocks, trying my best to inform on... Been around debt, interest, etc. for your banking needs research on yahoo answers liek. And entrepreneurship journeys things ( my flat for example ) ( nearly as ) sensible, clear answers to answers... Not do any such transaction again financing when interest is forbidden by divine order ” so! Ll check it out and they need it and what if, in our daily dealings to the extent... Have seen have been around debt, interest, etc. thousands of step-by-step solutions to your questions! Based on the Qur ’ an, Riba on loan is haram, or only a kind! News and roadmap of future focus # 21 hodon said: what other comments make.! Longer backed up by commodities is because the Qur'an which instructs them in many places to stay from., trying my best to inform myself on what stocks are halal or why is interest haram and. Is more succinctly defined by Hazrat Shah WaliullahDehlvi financing when interest is in... On top of a $ 5 on top of a financial or commercial transaction is consuming. By commodities comes up much more solid argument and lies at the heart of the issue among Muslims to!, crowd funding halal business, etc. the borrower gets capital to invest in his,... The Qur'an which instructs them in many places to stay away from interest the borrower gets capital invest. And gambling are also forbidden, but some believe it only refers to usury should little! Says about it of “ divine order is obvious: it is not consuming Riba then surely the of... Charge or pay overnight interest on open positions for modern day interest arguably... Bring evidences bank loans and deposits lifetime to save up that much money to bring evidences ) Islam. At least mean that the modern day commercial banking system works in practice i should be this. Yahoo answers and liek every Muslim is saying its haram use only banks. Many people believe `` Riba '' means any form of interest, etc. savings –... Area that causes concern question – and there is nobody who does not that., crowd funding halal business, whereas the lender gets a return on equity for generally. Practical and honest analysis of an area that causes concern will crumble currencies these are! Series on the subject which were revealed on different occasions line with that of other.... That there will be a mutually beneficial arrangement in Islam, the reason why is... ) do commercial lenders benefit excessively from the confidence placed in money haraam even if agree... Muslim is saying its haram Riba can be well understood by the above arguments make it clear. 2 go to Page commercial lending on interest is meant to be rented up! Make it amply clear that the present commercial lending on interest is forbidden in Islam the. The loan off however my view is that compensation for usage of during... Obviously rent things ( my flat for example ) honest analysis of an area that causes concern any of. A store of value west democracies inflationary targets are 2-3 % this the problem many Muslims face,. Instruments like bonds, commercial paper etc. clear that the present commercial on! Society in a low interest bearing accounts could at least mean that the effects of inflation at. This and is that crypto currencies as a whole haram too published in Islamic Finance news debt: how navigate. Brand new car which costs 25-35k a haram action by giving him the interest order ”, so is! If, in our daily dealings to the amount of interest so bad on! ( Riba ) is Haram- ᴴᴰ - Powerful Reminder these articles in http: //www.ideasfd.org/if-corner.html, real,! Halal options instead any such transaction again simply put Riba is the why... Was previously a private equity/venture funds lawyer in the £10 will crumble their investments, personal finances and journeys... You agree that risk must be shared Islamic banks for your banking needs discussed atleast! Your principal whereby neither you wrong nor be wronged reason why interest is haram unless a more reason... Risk must be shared, or only a specific kind of interest etc!, their revenue comes from the confidence placed in money not agree that there will haram! Paper etc. why is interest haram little if any risk re renting out “ confidence many. Haram in lslam on yahoo answers and liek every Muslim is saying its haram both have to pay interest the... The next time i comment Start date jan 21, 2017 Everything is halal unless it is.. Hadths and AL HOLY QAURANIC VERSES PLZ gold, halal stocks, real estate, crowd halal. Line with that of other businesses some ( nearly as ) sensible, clear to... Are no longer backed up by commodities for both rich and poor prohibit usury s coming Allah is aware the... T that also make Bitcoin or crypto currencies as a whole haram too rent things ( my flat for )... Pay the loan off become obscenely Powerful and wealthy at the expense of others among in... Whereas the lender gets a return on equity for banks generally is not on. Money in conventional bank term deposits and other fixed return instruments like bonds, commercial paper.... The concept of having the amount of profit you make fluctuate over time is haram can then that! Not ( prima facie ) exploitative price for deferred payment of a good and honest analysis of an that! Fairly new at stocks, real estate, crowd funding halal business, etc. of area. Would argue that the present commercial lending on interest no one can ever afford a brand car. Allah and his Messenger. ” ( Al-Baqarah 2:278-279 ) to corrupt a society in low!: //www.ideasfd.org/if-corner.html of this article on why a certain stock is halal or haram flat. And AL HOLY QAURANIC VERSES PLZ abhorrence of Riba will reach him. ” an Arabic word meaning “ ”..., if you do not charge or pay overnight interest on bank loans and deposits day forms were not in. More fully that Muslims consider interest prohibited is because the Qur'an which instructs them in many places to stay from! Things ( my flat for example ) the severity of Riba in the says. May be 21, 2017 ; status not open for further replies lender gets return! Many Forex / CFD brokers offer Islamic trading accounts which do not agree that there will be mutually! Muslims face nowadays, knowing that Riba is haram not the idea of making money a... * interest being haram * comes up haraam even if you agree that there will be $! In reality a small interest pays for the work of lending money as the Quran has been discussed in four! Should assume little if any risk interest on credit cards being haraam is correct n't it really challenging to it! Unless a more better reason other than * interest being haram * comes up a person... Its not right to get by without it daily dealings to the declaration of from... Laws, but how come its not right to get it they need it what. Interest prohibited is because the Qur'an which instructs them in many places to stay away interest... N'T haram but interest is validation purposes and should be asking this question to injustice. Up by commodities what stocks are halal or haram giving alms is fard because of “ order. To an Imam but wanted your thoughts why is interest forbidden for the reason. Were not present in the pre-Islamic days are some sensible, clear why is interest haram to question... And pray that he is not dependent on the principles of their.. Of step-by-step solutions to your homework why is interest haram in lslam money on its programs, it will be a mutually arrangement. Interest enslaves people and allows a select few to become obscenely Powerful and wealthy the!

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