Concept Of Riba in Islamic Muamalah Maliyah

konsep RIba dalam ISLAM

1. The Concepts Of
Interest, Usury And Riba
Introduction
Definition of riba
The prohibition of riba
Types and classifications of riba
The differences between riba and profit
Conclusion

2. INTRODUCTION
Interest in the modern financial world is
commonplace.
It is a staple feature of capitalist system that
values profits above everything else, via
competition rather than co-operation.
Despite the amount of wealth that the
Western economic system has created, there
are major concerns over the huge disparities
that have developed between rich and poor.

3. THE MEANING OF RIBA
Riba has been extracted from Raba. It
means addition, increase. So, riba literally
means to increase, to grow to rise, to add, to
swell. It is, however, not every increase or
growth which has been prohibited by Islam

4. THE MEANING OF RIBA
In the Shari’ah, “riba” technically refers to the
premium that must be paid by the borrower to the
lender along with the principal amount as a
condition for the loan or for an extension in its
maturity.
In this sense riba has the same meaning as interest
in accordance with the consensus of all jurists
without any exception.
So the Holy Qur’an and the Hadithdo not make any
such difference between usury and interest. Interest
and usury both are taken as synonymous for the
Arabic word riba.

5. PROHIBITION OF RIBA IN THE
HOLY QURAN
In several verses of the Holy Qur’an,
Allah(swt) has mentioned the consequences
of riba.
The Qur’an did not declare the prohibition of
riba in the early stage of revelation, rather we
find that the complete prohibition of interest
came sequentially.

6. “Those who devour usury will not stand except as stands
one whom the evil one by his touch hath driven to
madness. That is because they say: ‘Trade is like usury.’
But Allah hath permitted trade and forbidden usury.
Those who after receiving direction from their Lord,
desist, shall be pardoned for the past; their case is for
Allah (to judge). But those who repeat (the offence) are
companions of the fire, they will abide therein (forever)”
(2:275)
“That they took riba (usury), through they were forbidden
and that they devoured men’s substance wrongfully –
We have prepared for those among men who reject faith
a grievous punishment.” (4:161)

7. PROHIBITION OF RIBA IN THE
HADITH
Jabir reported: The Prophet (saw), cursed the
receiver and the payer of interest, the one who
records it (the contract) and the two witnesses to the
transaction and said, “they are all alike (in guilt).”
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.”

8. TYPES OF RIBA
RIBA AL-NASI’AH
The term nasi’ahmeans to postpone or to wait and
it refers to the time period that is allowed for the
borrower to repay the loan in return for the addition
of the premium.
Hence it refers to the interest on loans. The
prohibition of riba al nasi’ahessentially implies that
the fixing in advance of a positive return on a loan
as a reward for waiting is not permitted by the
Shari’ah[i][14].

9. TYPES OF RIBA
RIBA AL-FADL
Riba al-fadlis the excess over and above the loan
paid in kind. It lies in the payment of an addition by
the debtor to the creditor in exchange of
commodities of the same kind.
It is related that Abu Said al-Khurdi said: “the
Prophet Muhammad (saw) has said that gold in
return for gold, silver for silver, wheat for wheat,
barley for barley, dates for dates and salt for salt,
can be traded if and only if they are in the same
quantity and that is should be hand to hand. If
someone gives more or takes, then he is engaged in
riba and accordingly has committed a sin.”

10. TYPES OF RIBA
Riba al-Qard
The term qardmeans to borrow;
Ribaqardrefers to a benefit or profit which creditor
has to pay along with the amount of loan because of
duration (late payment).
The benefit/ profit can be a cash or an usufruct
(manfa’ah/ benefit from object).
Any attempt to get profit from loan contract is
considered ‘akl riba’(taking interest) as in maxim of
fiqh: “Kull qard jarra naf’an fahuwa riba”, which
means: All loans lead to a benefit are riba(i.e.
interest).
Riba al-qardis a part of riba al-nasiah. (riba a-duyun)

11. TYPES OF RIBA
Riba al-Yad
The term yad means hand.
Riba yadrefers to a benefit derived from the duration
between delivery and acceptance of contracted item and
price.
In money exchange (e.g. RM to USD), the delivery of
money from money changer to a buyer shall take place at
the same time and place (same majlis) where the money
changer accepted the buyer’s money.
In cash and carry contract, the seller has to surrendered
the contracted item whereby he holds the payment from
buyer.
Delay in surrendering the contracted item or the payment,
in cash contract, from any side of the parties involved, is
prohibited because that party can access to the benefit of
received item but not the other party.

12. One of the presumptions of the theory of interest is that
MONEY HAS BEEN TREATED AS A COMMODITY
Ifonecanleasehispropertyandchargearentagainstit,
hecanalsolendhismoneyandclaiminterestthereupon
•
Ifmerchantcansellacommodityforapricehigherthan
hiscost,hecanalsosellhismoneyforahigherprice
thanitsfacevalue
•
ISLAMIC PRINCIPLES
DO NOT SUBSCRIBE TO THIS
The Nature of Money

13. In Islam, MONEY and COMMODITY
have different characteristics and uses

14. COMMODITYMONEY
Commodity sold or
purchased are identified to a
particular unit
Money cannot be pin-pointed
in a tansaction of exchange
•
A commodity can be of
different qualities
Money has no quality except
as a measure of value and
medium of exchange
-all same denomination money
equals 100% to each other
•
hasintrinsicutility
-can be utilized directly without
exchanging it for some other thing
hasnointrinsicutility
-cannot be utilized in direct
fulfilment of human needs
-canonlybeusedforacquiring
somegoods&services
•

15. Islamic alternatives to interest Rates
Trading as a way to avoid interest.
Trading through various types of contracts
such as sale and purchase contracts,
partnership contracts, leasing and so on.

16. The differences between interest and
trade
Firstly:
In trade the purchaser and the vendor exchange on
the basis of equality. For the purchaser derives profit
from that which he purchased from vendor, while the
latter gets profits in consideration of the labour and
time.
In interest the creditor get for himself a definite
amount of money for his loan but all that the debtor
is certain of is the time to use the money. During this
time period it is not always possible for debtor to
make a profit.

17. Secondly:
From the point of view of trade, the moment a
commodity is exchanged for its price, the
transaction come to an end.
But in the case of interest, the debtors
actually spends the amount borrowed from
the creditor and has to return the same
amount with an addition by way of interest.

18. DIFFERENCE BETWEEN PROFIT
AND INTEREST (1)
The settlement of profit between the buyer and the
seller is made on equal terms. The buyer
purchases the article he needs and the seller gets
profit for the time, labour and brains he employs in
providing that article to the buyers.
In the case of interest, obviously the debtors
cannot settle the transaction on equal terms with
the creditor because of his weaker position.
As far as the money lender is concerned, he gets
that fixed sum of interest which he considers as
his profit.

19. If the debtors spends the borrowed money in
fulfilling his personal needs, the time factor
definitely does not bring any profit at all.
And if he invests that money in trade, commerce,
industry, agriculture, then there are equal chances
of profit or loss.
Thus lending money at interest might bring a
guaranteed and fixed profit to one party and loss
to the other, or a guaranteed and fixed profit to
one party and an uncertain and indefinite profit to
the other.

20. DIFFERENCE BETWEEN PROFIT
AND INTEREST (2)
Thetradechargeshisprofit,howeverhighitmay
be,onceandforall,butmoneylendergoeson
charginginterestoverandoveragainandgoeson
increasingwiththepassageoftime.
Theprofitwhichthedebtormakeonmoneyofthe
creditors,however,largeitmay,hasafterallits
ownlimits,butthereisnolimittotheinterestthe
creditormaychargeonhismoney.
Hemay,assomethingactuallyhappens,receive
alltheearningofthedebtor,mayevendeprives
himofallthemeansoflivelihoodorofthearticles
ofhispersonaluseandstillmighthavethesame
amountofdebtagainsthimthatwasatthetimeof
borrowing.

21. DIFFERENCE BETWEEN PROFIT
AND INTEREST (3)
Thetransactionintradecomestoanendassoon
asthearticleanditspricechangehands.After
thisthebuyerisnotrequiredtoreturnanythingto
theseller.
Asregardstherentoffurniture,house,land,the
lentthingisnotitselfspentupbutitreturnedtothe
owneraftertheterm.
Butinthecaseoftheprinciplethedebtorhasto
spenditfirstandthereproduceitandreturnit,to
thecreditoralongwiththeinterest.Thusthe
debtorrunsadoublerisk,hehastoreproducethe
principleandalsotoproduceitsinterest.

22. Thank you