What is Riba, Qimar and Gharar and their importance according to shariah

What is Riba, Qimar and Gharar

1. Riba in Islam & The Islamic Banking Alternatives By : Shariah Compliance Department Taqwa Islamic Banking The Bank of Punjab

2. The interest which you give to increase the wealth of people, will have no increase with Allah: But that which you lay out for charity, seeking favor of Allah (He will increase): it is these who will get a recompense multiplied.” Ar Rum 39 (First Revelation)

3. “Because of their abuse, We forbade the Jews good things which were formally allowed to them; because time after time they debarred others from the path of Allah: Since they practice Riba although they were forbidden -- and cheat others of their possessions. We have prepared a painful torment for those of them who disbelieve.” An Nisa 161 (Second Revelation)

4. “O’ believers, devour not Riba, doubling its rate many times. Fear Allah, and you will prosper.” Al-e -Imran 130 (Third Revelation)

5. “Those who devour Riba shall rise up before Allah like men whom Shaitan has demented by his touch; for they claim that trading is like usury. But Allah has permitted trading and forbidden usury. He that receives an admonition from his Rabb and mends his ways may keep what he has already earned; his faith is in the hand of Allah. But he that pays no heed shall be among the people of fire and shall remain in it forever.” Al Baqarah 275 (Fourth Revelation)

6. “Allah has laid His curse on Riba and blessed charity with increase. He bears no love for the ungrateful sinners.” Al Baqarah 276 (Fourth Revelation)

7. “O you who believe, Fear Allah and give up what remains of your demand for Interest, if you are indeed a believer. If you do not, then you are warned of the declaration of war from Allah and His Messenger; But if you turn back you shall have your principal: Deal not unjustly and you shall not be dealt with unjustly.” Al Baqarah 278 - 279 (Fourth Revelation)

8. Riba: Selected Ahadith From Hazrat Jabir Ibn-e-Abdullah (RA): The Prophet, may peace be on him, cursed the receiver and the payer of interest, the one who records it and the witnesses to the transaction and said: "They are all alike [in guilt]." (Muslim, Tirmidhi and Musnad Ahmad) From Hazrat Abu Hurayrah (RA): The Prophet, peace be on him, said: " Riba has seventy segments, the least serious being equivalent to a man committing adultery with his own mother." (Ibn Majah )

9. Riba: Selected Ahadith From Hazrat Amr bin Al Aas (RA): “When interest based dealing becomes common among people, they will start facing drought and shortage of food. And when bribery becomes norm among people they will live under constant fear of their enemy”. From Hazrat Abu Hurayrah (RA) : The Prophet, peace be on him, said: "There will certainly come a time for mankind when everyone will take Riba and if he does not do so, its dust will reach him." (Abu Dawud , Ibn Majah )

10. What is Riba? کل زیادۃ لا یقابلھا عوض فھوربا Riba means any excess compensation over and above the principal which is without due consideration.

11. Difference between Loan and debt. LOAN: Every amount that is extended by a lender to a borrower is called Loan. DEBT: liability which is Stand against goods or services is called debt.

12. LOAN AND DEBT. SHARIA RULE: Any excess taken on Loan or Debt is called Riba.

13. CLASSIFICATION OF RIBA

14. “that kind of loan where specified repayment period and an amount in excess of capital is predetermined”( Imam Abu Bakr Hassas Razi ) Riba-un- Nasiyah or Riba-al- Jahiliya real and primary form of riba premium paid to the lender in return for his waiting giving or taking of every excess amount in exchange of a loan at an agreed rate irrespective of whether it is low or high 1. Riba-un- Nasiyah or Riba-al- Jahiliya

15. Any excess taken in exchange of specific commodities which are homogeneous legal definition defers in every fiqh Riba-al- Fadl

16. Hadith prohibiting Riba-al- Fadl ‘sell gold in exchange of equivalent gold sell silver in exchange of equivalent silver sell dates in exchange of equivalent dates sell wheat in exchange of equivalent wheat sell salt in exchange of equivalent salt sell barley in exchange of equivalent barley sell barley in exchange of equivalent barley but if a person transacts in excess, it will be riba . However sell gold for silver anyway you please on the condition it is hand-to-hand(spot sales) and sell barley for date anyway you please on the condition it is hand-to-hand(spot sales)

17. commodities must have two common characteristics Weight Volume includes all commodities having weight or volume and are being exchanged Imam Abu Hanifa on Riba-al- Fadl

18. commodities must have two common characteristics be a medium of exchange be edible includes all commodities that are edible or can be used as a medium of exchange(currency) Imam Shafi on Riba-al- Fadl

19. commodities must have two common characteristics can be preserved be edible includes all commodities that are edible and can be preserved Imam Maalik on Riba-al- Fadl

20. First citation conforms to the opinion of Imam Abu Hanifa Second citation conforms to the opinion of Imam Shafi Third citation includes three characteristics at the same time i.e. edible, weight and volume Imam Ahmad Bin Hanbal on Riba-al- Fadl

21. 1. Sood -e- Mufrad ( Simple Interest) interest calculated only on the initial investment 2. Sood -e- Murakkab (Compound Interest) reinvestment of each interest payment on money invested to earn more interest Riba al Nasiah is classified in two types :

22. 1. Tijarti Sood (Commercial interest) interest paid on loan taken for productive and profitable purpose 2. Sarfi Sood ( Usury ) interest paid on loan taken for personal need and expenses Riba al Nasiah is classified in two types :

23. Difference between Money and Commodity

24. What is our contribution?

25. Islamic vs. Conventional Banks

26. Islamic vs. Conventional Banks

27. Islamic vs. Conventional Banks

28. Islamic vs. Conventional Banks

29. Islamic vs. Conventional Banks

30. Gambling (Maysar) and Uncertainty (Gharar)

31. According to Quran Quran condemns gambling يأيها الّذينءَامنوا إنّما الخمر و الميسر والأنصاب والأزلامُ رجسٌ من عمل الشيطن فاجتنبوه لعلكم تفلحون (5:90) إ نَّمَا يُرِيدُ الشَّيْطَانُ أَن يُوقِعَ بَيْنَكُمُ الْعَدَاوَةَ وَالْبَغْضَاءَ فِي الْخَمْرِ وَالْمَيْسِرِ وَيَصُدَّكُمْ عن ذِكْرِ اللَّهِ وَعَنِ الصَّلَاةِ ۖ فَهَلْ أَنتُم مُّنتَهُونَ   (5:91) “O you who believe: Indeed intoxication, Gambling, Dedication of Stones, Divination by Arrows are an Abomination of Satan’s handwork so avoid such abomination” (5:90) Satan's plan is (but) to excite enmity and hatred between you with intoxicants and gambling and hinder you from the remembrance of Allah and from prayer (5:91)

32. According to Ahadith The messenger of God forbade the “sale of the pebble” and the sale of Gharar (Muslim) “Do not buy fish in the sea, for it is gharar ” (Bukhari)

33. Gharar: Gharar in a contract exist, in case of Fraud, uncertainty or ambiguity. Gharar is unmeasurable and unquantifiable risk (trading in grave risk)

34. Types of Gharar.

35. Gharar Kaseer exist in.

36. Qimar (قمار) Every form of money acquisition of which depends on luck and chance as opposed to others equally eligible for it. Lottery & Lucky draws Speculative gains in Conventional Financial Markets

37. Any Question ?

38. جزاك الله خيرا