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The prohibited elements in Islam

The prohibited elements in Islam. Prohibited Elements. Riba- interest/usury Gharar- uncertainty/deception Haram Activities -casinos, gambling, pornography, breweries, and interest-based financial services. Riba in Islam.

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The prohibited elements in Islam

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  1. The prohibited elements in Islam

  2. Prohibited Elements • Riba- interest/usury • Gharar- uncertainty/deception • Haram Activities -casinos, gambling, pornography, breweries, and interest-based financial services.

  3. Riba in Islam • The Arabic word 'riba' means to increase (al-ziyada), to grow (al-numuw), to multiply, to expand, to rise and to become lofty (al-irtifa and al-uluw) • Technically it denotes, in a loan transaction, any increase or premium or advantage obtained by the lender as a condition of the loan.

  4. Types of Riba • 1. Riba An-Nasi’ah– This riba occurs when time is allowed for the borrower to repay the loan after its due date. In return, the borrower must pay the additional or premium for the extension in duration. i.e. Interest on lent money or capital. • 2.Riba Al-Fadl– This is riba which occurs as a result of trade or sale transactions. Taking a superior thing of the same kind of goods by giving more of the same kind of goods of inferior quality, e.g., dates of better quality for dates of inferior quality in greater amount.

  5. Prohibition of riba in Al Quran • This shows interest deprives wealth of God’s blessings. • “That which you give as interest to increase the people’s wealth increases not with God, but that you give in charity, seeking the goodwill of God, multiplies manifold “.(Surah Ar Rum:39). • This verse indicates the seriousness a felony of taking interest in the eye of The Almighty. • “And for their taking interest even though it was forbidden for them, and their wrongful appropriation of other people’s property. We have prepared for those among them who reject faith, a grievous punishment “.(Surah An Nisa:161).

  6. Prohibition of riba in Al Quran • Muslims to stay clear from interest for the sake of their own welfare. • “O believers, take not doubled and redoubled interest, and fear God so that you may prosper. Fear the fire which has been prepared for those who reject faith, and obey God and the Prophet so that you may receive mercy”.(Surah Al-Imran:130-2)

  7. Prohibition of riba in Al Quran • Surah Al-Baqarah (275-281) establishes a clear distinction between interest and trade – • "Those who benefit from interest shall be raised like those who have been driven to madness by the touch of the Devil; ...this is because they say: "Trade is like interest" while God has permitted trade and forbidden interest. Hence those who have received the admonition from their Lord and desist, may have what has already passed, their case being entrusted to God; but those who revert shall be the inhabitants of the fire and abide therein for ever."(275)

  8. Prohibition of riba in Hadith • Abu Hurayrah (ra) narrated that the Prophet (saw) said: • “”God would not allow four persons to enter paradise or to taste its blessings: he who drinks wine, he who takes riba, he who usurps an orphan’s property without right and he who is undutiful to his parents.” • The Prophet said: "There is no riba except in loaning." (Nasa’ee)

  9. Prohibition of riba in Hadith • “Gold for gold, silver for silver, wheat for wheat , barley for barley, dates for dates and salt for salt – like for like, equal for equal and hand to hand; if the commodities differ, then you may sell as you wish , provided that the exchange is hand to hand.” • It is reported from Usamah bin Zayd that the Messenger of God said: "There is no riba • in what is hand to hand (on the spot)".

  10. The rationale of prohibition of riba • 1. Riba as Unearned Income • Islam only permits trade but forbids riba or usury. Profits are the result of initiative, enterprise and efficiency. Interest is fixed, but profit fluctuates. • In the case of interest, a person knows his or her return and can be sure of it. This interest or riba here is an unearned income. In the case of profit, a person has work hard to earn the profits.

  11. The rationale of prohibition of riba • 2.Riba as Exploitation of the Needy • The condemnation of riba or usury is in the form of charging for loans to the poor. A parallel modern argument relates to the devastating social impact of the so-called “Third World debt crisis”. • 3.Riba as a Mechanism of Inequitable Redistribution of Wealth • The observation that riba or usury acts as a mechanism by which 'the rich get richer and the poor get poorer' is common to several traditions. Islam rejects financial interest on the basis that it contradicts the Principle of Distributive Equity

  12. The rationale of prohibition of riba • 4.Riba as an Agent of Economic Instability • An endemic factor in the instability of interest-based economies, i.e. the cycles of boom and bust, recession and recovery. Ahmad (1958) claims “the greatest problem in the capitalist economy is that of the crises and interest plays a peculiar part in bringing about the crises”.

  13. The rationale of prohibition of riba • 5. Riba as Discounting the Future • The practice of discounting future values are using compound interest - results in an appreciation in invested monetary capital, • It is presumed rational for people to prefer having a specified amount of currency now than the same amount some time in the future. This simple and rarely questioned logic has several disastrous implications. For instance, Pearce and Turner (1990) note that discounting affects the rate at which we use up natural resources - the higher the discount rate, the faster the resources are likely to be depleted.

  14. The evils of Riba (Abdullaah Saalih Al Qusayyir) • 1. Disobedience to Allah and prophets. • 2. Deprived of blessings of life and earnings. • 3. Hard-heatedness and been turned away from goodness. • 4. Deprivation from goodness. • 5. Oppression of the people. • 6. Turns away from legitimate business. • 7. Cause of colonialism. • 8. Dungeon through which society suffocates itself. • 9. Cause ruin and bankruptcy. • 10. Cause of great evil and sins.

  15. Riba free economy • Islam wishes to establish justice between the financier and the entrepreneur.The prohibition of riba is important : • -to ensure justice in Islamic economy • -to remove all forms of exploitation through unfair exchanges and • -to close all back doors to riba because in Islamic Shariahanything that serves as a means to the unlawful is also unlawful.

  16. CONCLUSION Aware of this reminder: (Al Baqarah: 281) “ And be afraid of the Day when you shall be brought back to Allah. Then, every person shall be paid what he earned, and they shall not be dealt with unjustly”

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