Al-Riba

[latif]

Respected Scholars!

Salamun Alaikum

May I know which form of Riba is Haram?

Riba in Arabic literally means increase, gain or profit.
No where in Quran Riba is prohibited.

Quran however prohibits Al-Riba (2:275). This is a proper noun pointing out to something not ordinary.

To know the pertinence/context of the term Al-Riba. We may examine a couple of verses adjoining the verse prohibiting Al-Riba.

Reading verse 2:272 to 2:280 we find that the issue discussed in these verses is, helping the poor deserving charity.

Explaining how to help a poor, Allah says “ help them by way of charity and if you cannot help them by charity, then give them loan and charge no usury. Such people may not be able to pay back the loan in time. If so, give them more time or remit the loan as charity. Now this is the discourse that surrounds the word Al-Riba. The debtor being discussed here is the poor deserving charity. Study of these verses (2/272-280) tells us of the circumstances under which making money is prohibited?

Amazingly, every where in Qur’an, Al-Riba is contrasted with Charity. This obviously means that Al-Riba is haram where charity is called for.

Amazingly again, the Qur'an nowhere condemns the giver of usury. This is perhaps the givers of usury are the poor exploited to accept loans with usury. All these facts put together are sufficient to prove that Qur’an prohibits charging of interest from the poor deserving charity.

An increase, gain or profit on commercial loans aimed at inflating resources does not fall in the purview of Al-Riba prohibited in Qur’an..

I may not be all correct but what sounds obvious deserve careful consideration. I would be obliged for guidance.

Muhammad Latif Chaudhery
Student of Qur’an
Cell 0321 402 1162 Phone 042-6852486
Email quraan@wol.net.pk

PS:
The verses quoted are appended below for ready reference.
2:272 Your responsibility (O Messenger!) is only to show them the Right Way (and not to make them walk it). He has established Rules for attaining Guidance. (O People!) Whatever good you give benefits your own "Self" when you spend for the sake of Allah. Any charity you give will be repaid to you, without the least injustice. (Allah's rules/laws for guidance: 2:2, 2:26, 5:46,
7:52, 13:27, 14:27, 20:123, 27:2, 28:50, 31:3, 39:3, 40:34, 40:74)
2:273 And give to the needy who are suffering in the Cause of Allah and cannot emigrate and those who are unable to go about the earth in search of livelihood. One, who is unaware of their condition, might think they are free from want, because they abstain from begging. But you can recognize them by certain signs though they do not beg insistently. Whatever good thing you spend on them, Allah is Aware of it.
2:274 Those who spend their wealth on the needy, by night and by day, secretly or publicly, have their reward with their Sustainer. They shall have nothing to fear or regret.
2:275 On the other hand are those who eat Riba (usury). In greed of money, they run around like someone who has been bitten by a snake. They claim that trade is like usury. This is not so. That is why Allah, in His Infinite Wisdom, has permitted trade and forbidden usury. One to whom the clear Admonition has come from his Sustainer, must abstain from taking usury forthwith. What he has taken in the past, he may keep and his judgment rests with Allah. (It is better for him to return the interest he has earned if possible, but the law shall not force him to do so). As for him who returns to usury, such are the companions of the Fire wherein they shall abide.
2:276 Allah blights usury and blesses charitable deeds with prosperity. Allah does not love those who defy His Laws and drag down the potential of the human society.
(Mankind will eventually realize that the interest based economic system will have to be replaced with an equitable System. Allah's Laws of Economic Development will erase usury and nurture welfare).
2:277 Those who believe in Allah's Laws, do works beneficial to the society, strive to establish the Divine Order and the Zakat Cooperative System, have their reward with their Lord. They will have nothing to fear and no reason to be despondent. (The government is responsible for setting up the Zakat System).
2:278 O You who have chosen to be graced with belief! Be mindful of the Divine Laws and give up what remains of your demand for usury, if you are really believers.
2:279 And if you do it not, then know that you are at war with Allah and His Messenger. But, if you mend your ways, simply take back your capital without interest. Inflict not injustice and you will not incur injustice.
2:280 If a debtor is in difficult circumstances, let there be postponement to a time of ease. And if you give up the loan entirely as charity, it is better for you if you only knew.
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[latif]

Deleted

[bkanwar2]

Dear Brother, I am not a scholar, just a beginning student of Quran, but will try to address issue raised in your post.

You are correct about literal meaning of Riba. It was used to indicate gain in any business transections. This brings the issue if the gain in any business transection is prohibited than what is the gain one can have? Before, exploring answer to this question let us remember one of the purpose of advant of PROPHET. He came to bring people out off darkness. Darkeness of oppression

الر كتاب انزلناه اليك لتخرج الناس من الظلمات الي النور باذن ربهم الي صراط العزيز الحميد

14:1 A.L.R. Alif-Laam-Ra (Allah, Lateef the Unfathomable, Raaziq the Provider, states that), A Divine Writ is this that We have revealed to you (O Prophet) So that you may bring forth all mankind, by their Sustainer’s leave, out of darkness into Light. On to the Way that leads to the Almighty, the Owner of all Praise. [14]

Futhermore, at several place Quran says that ones compensation is only what you earn/work for. Please see below.

قل للذين امنوا يغفروا للذين لا يرجون ايام الله ليجزي

قوما بما كانوا يكسبون

45:14 Tell those who have chosen to believe, to forgive the ones who do not hope for the Days of God. It is for Him alone to recompense each nation for what they have earned. [Yaghfir, Ghafarah and derivatives = Forgive = Preserve = Protect from the harmful effects of misdeeds. Days of God = Life Hereafter = The Day of Resurrection, Judgment, Reckoning = When people establish the Divine Rule on earth. 14]

In any trade there are two things involved, 1. INVESTMENT/CAPITAL and 2. LABOUR. One is allowed to charge gain on portion of labour/expense involved in perportionate to labour for runing bussiness, but not on CAPITAL. Therefore, Riba is more comprehensive concept than just intrest. Imagine, if our bussiness community follows this Law, how problems will be solved.

Since in lending money only, there is not a lot of labour is involved, hence gain not allowed. Futhermore, such gain would be oppression of oppressed and going back to darkness hence not allowed.

You are absolutly correct Quran no where prohibits from paying intrest as it will be further oppression of already oppressed and against Quranic spirit. Hope this helps.

Badar

[Sidqi]

What is Riba?
by Dr. Khalid Zaheer Posted 13 July 2007

One of the most obvious reasons why modern banking is condemned conflicting with the Islamic teachings is “the unequivocal prohibition of riba by Quran, which the consensus of Muslim jurists has interpreted as covering all kinds of interest... “(Siddiqi 1983,9). The income of most of the banks comes predominantly from the difference between the interest they charge on loans to their borrowers and what they pay to their depositors.

The Quran prohibits interest primarily because it is unfair. In this article we will take up some of the more important questions concerning the nature of interest to show that the interest charged by the banks is very much within the scope of riba which has been prohibited in Islam.

Definition
As regards the definition of riba, Ahmad (S.M.) has rightly pointed out that if while reading Quran “lakum ru’us amwalikum [sic] (2:279) is read with zaroo ma baqiya min al-riba [sic] (2:278) we easily reach the definition of riba [sic]. Any excess above the borrowed sum [charged by the lender] is interest” (Ahmad, S.M 1989, 43). Abu Bakar Al-Jassas has defined riba-based arrangement thus: it is loan given for a certain duration with the condition of an increased obligation on the borrower [compared to the principal borrowed] (Al-Jassas n.d. Vol. 1,469).

The clarification offered by Pakistan’s Federal Shariah Court’s Judgement on Riba is quite unequivocal It also states that it makes no difference whether the loan is for consumption purposes or for commercial purposes. Similarly, it does not matter if the rate of interest is low or high, simple or compound, for short or’ long term, between two Muslims or between a Muslim and a non-Muslim or between a citizen and a state or between two states. Any excess which is pre-determined over the principal sum in a loan transaction will constitute riba all circumstances.

The above verdict is not the first of its kind to be presented by a group of Muslim legal experts on the subject in recent times. More than a quarter of a century ago in the Second Annual Conference of the College of’ Islamic Research in Cairo it was declared that “interest charged on the various kinds of loans constitutes unlawful usury, regardless of whether the loan is for what is called consumption or production [purposes]. ”It also affirmed that “much and little usury is unlawful”. Although ii has not been explicitly clarified in the above statement, the definition does seem to imply that in Islam riba does not recognize any distinction between interest agreed by the pasties and interest charged for de1ay in payment as penalty, as the laws of present-day states likes, for instance, Egypt and France do.

Interest and Rent
Many modern writers tend to confuse interest with rent because of the apparent similarity in the two arrangements of carrying a fixed charge. The distinction between the two, though, is quite clear. Whereas interest, in the context of the Islamic teachings. is the fixed return demanded from another party on borrowing something which by nature is such that It is exhausted when it is put to use, rent is associated with those assets which remain, by and large, intact while they are in the process of being used. Interest has been prohibited because, once exhausted, the remaking of the borrowed article itself is not guaranteed. The only fair way to lend such articles, therefore, is to do so on a sharing agreement for business purposes and an interest-free basis on loans for personal needs)’ In the case of rental agreements, since nothing normally happens to the asset borrowed, the borrower is not likely to be in serious trouble like his counterpart hi the interest-based arrangements and should, therefore, have no difficulty in paying the fixed charge. In a cue where something happens to the asset that destroy it completely or partially, it is the sole responsibility of the owner, unless it is proved flit the user damaged the asset deliberately or was guilty of willful neglect in protecting It. Indeed, the lender of Interest-based loans also undertakes the default risk, yet that risk is only in the event that the borrower disappears or somehow proves that he is unable to pay back the loan even from his personal wealth. Under normal circumstances the lender is able to recover his fixed charge from the borrower. Moreover, what is more important is the fact that the lender does not intend to forego his interest even in the case where the borrower loses the principal amount as well. The fact that the latter sometimes gets Say without paying interest or even the principal amount is not because of a kind-heisted disposition on the part of the lender, but rather in spite Of his firm resolve. In short, the only reason why Qur’an has prohibited interest is that the chargers of interest disregard the plight of the borrowers and not necessarily because they do not undertake any risk at all It is therefore, not quite correct to state that in Islam the “general principle which is beyond dispute as being the criterion for determining the permissibility or otherwise of any method of financing a that the financier cannot avert the taking of some risk if he wishes to derive an income” (Chapra 1985, 166).

Keynes made a distinction between interest charged on capital and the rent on land by suggesting that while there could be intrinsic reasons for scarcity of land, there west none in the case of capital, at teat in the long run. (Keynes 1973, 376) Indeed, there are reasons for criticism on charging interest from a purely economic point of view as well; however, the basic reason. Why it has been condemned by Islam is moral, i.e. interest exploits the need of individuals and stems from greedy and selfish motives of the owners of capital in complete disregard of benevolence, justice, and fairy play. Rent, under normal circumstances, if it is not unfairly exorbitant, cannot be subjected to the same criticism.

Interest on Consumption Loans
There are writers who believe that only that type of interest which is charged by rich money-lender on consumption loans to the poor is prohibited by Qurãn. The Advisory Council of Islamic Ideology of Pakistan too in its meeting on January 33, 1964 at Karachi decided “that ‘Riba’ is forbidden but is in disagreement as to whether ‘Interest in the form in which it appears in public transactions’ which in the opinion of Council includes ‘institutional credit’ as well would also be covered by ‘Riba’ specified in the Holy Quran...” There are others who believe that there, was no direct evidence in the original teachings of Islam refuting that claim (Khan, W.M. 1985. 27).

There have been attempts to refute such claims and misgivings on the basis of Qur’an which, after declaring all interest-based borrowing and lending unlawful says “if a debtor is in want, give him time until his circumstances improve (Qur’an 2:280). It has been argued that Qur’an has, in this verse, directly refuted all such claims by mentioning that during the time of its revelation not all the borrowers were needy, otherwise the conditional statement “if a debtor is in want” would have appeared meaningless. Thus it is concluded that in those times too interest-based loans were taken out for commercial purposes as well and that interest is prohibited by Qur’an, whatever the purpose (lslahi, Amin A. 1976, 594-5) Islahi goes on to argue further from the wordings of Quran that in those days too most of the loans were needed for commercial purposes (ibid.). He has also quoted Hamiduddin Farahi’s (1863-1930) opinion about this verse. He quotes him thus:

It is quits evident from the wording of this verse [i.e. Qur’an 2] that the Arabs used to charge interest from the well-to-do as well. The people of Quraish, moreover, were traders and commercial interest was common amongst them. I, therefore, find not much of a difference between their conditions sad ours concerning interest and God knows, the truth (Ibid., 595).

The argument (mm Quran alone, however, does not appear to be as irrefutable as it has been made to look. In the absence of supportive historical evidence the verse cannot b claimed to be offering conclusive evidence to the effect that the borrowers at the time of revelation of Qur’an ware mostly well-to-do people who, ipso facto, ought to have borrowed for commercial purposes. What has been ignored in the argument is that the text is testifying to the fact that few borrowers were “in want” at the time of revelation of the relevant verses prohibiting and not necessarily at the time of borrowing. After all, is it not possible that the people who sit deprived at the time of borrowing remain no more deprived when the loans mature? Although It is not very likely that such a change of fortune can take place on a mass scale under normal circumstances, to assume that all borrowers were definitely well-to-do traders at that time is no more than a theoretical possibility, which makes the argument less than thoroughly convincing. However, there is enough historical evidence to show that the Arabs used to borrow funds purely for commercial purposes in the pro-Islamic period. Mecca, Taif, and Najran were well known commercial centres. In the absence of agriculture and industry, trading was the only source of earning and capitalists used to give loans on interest to merchants and entrepreneurs. Udovitch has firmly stated that “Any assertion that medieval credit was for consumption only and not for production is just untenable with reference to the medieval Near East“ (Udovitch 1970, 86). In the above mentioned quotation, Farahi has also supported his argument from Quran by presenting historical reference as well.

Simple Interest and Anatocism
There are again other writers -- like, for instance, Fazlur Rahman -- who think that only excessive compound interest is prohibited by Quran, and not the moderate, simple one.

Presumably ‘based on a similar opinion, interest exceeding 8 percent was prohibits in Egypt, prior to the introduction of the Civil Code of 1949. On the introduction of the code which was drafted under the supervision of ‘Abdar-Razzaq as-Sanhuri, some changes were introduced to the earlier law. One of the changes stipulated that interest on Interest was prohibited, Another stipulation of the act was that the totality of interest due should not be superior to the principal (Mallat 1988, 75-6). This latter stipulation seems to have had at least the qualified backing of Abu Zahrah (1898-1974), a prominent jurist from. the famous Islamic university of Azhar, Although he pleads that the bank; should operate on the principle of participation in the profits and losses (Abu Zahrah n.d., 57), he also offered his opinion about the stipulation referred to above thus: “The modern Civil Code of Egypt has established this Qur’anic principle (which prohibits charging of exploitative interest rates] and decided that of interests cannot exceed the principal” (ibid., 56).

The opinion of most of the writers who are in agreement, with the above views stems to be based on a verse of Qur’an which says: “O you who believe, do not take riba charging [it] doubled and redoubled” (Qur’an, 3:1 30). They conclude that since Qur’an has condemned charging of compound interest in this verse, all other vents too should be understood in the tight of this clarification.

This conclusion, however, is as unacceptable as if one were to conclude from the Qur’anic verse “Do not kill your children out of fear of poverty’ (Qur’an, 17:3)) that killing one’s children for reasons other than fear of poverty is legitimate according to Qur’ân. The two verses, far from bearing the meaning given by the two above-mentioned interpretations, are suggesting that whereas charging interest and killing one’s children are criminal acts in any case, they are even more detestable if they are committed “doubled and redoubled” and “out of fear of poverty” respectively. These additional phrases in the text are meant to expose the extremely callous nature of the crimes rather than to provide essential qualifying expressions to define the crimes themselves.

Is Indexation Allowed:
It has been explained above that Sunnah of the prophet has emphasized that in case of transactions involving credit, whether in the case of sale or financial debt, it is highly important that the returned article be absolutely identical to the one borrowed otherwise there is a danger of interest being involved in the exchange. This principle leads U5 to the question of return of financial loans in the inflationary or deflationary periods when the value of. the amount returned undergoes either depreciation or appreciation compared to what it was when borrowed. Obviously, if at the time of return of loan, for instance, the real value of the amount returned has eroded, then clearly the intent of the teaching of sunnsh is being violated. After all, money today has no intrinsic value of its own other than what it can buy (Ranlett. op. cit., 5). If the hundred pounds lent in 1991 by a person to another could buy x grams of gold and in 1992 when the amount was returned, it could buy y grams of gold (and x end y are unequal), clearly it would be a violation of the condition laid down in the hadith that “If you lend gold then receive back the same gold: the same weight and the same quality ...“ (Muslim. op. cit., Vol 4, 211). It also shows that giving interest to a lender in a period of high inflation at a rate less than the inflation rate, which is called negative rate of interest, is also unfair for the lender and, therefore, should be avoided. In other words, the prohibition of riba applies to real interest, not nominal interest, as with inflation a ban on the latter may result in negative real interest (Baldwin and Wilson 1988, 73). Moreover, in the case of deflation there is a possibility of positive real interest as well, even in the case a borrower is returning only the principal amount of’ the loan. Even though falling prices are practically seldom experienced, their occurrence is not impossible, as was experienced in the great depression of the 1930s.

The solution to the problem lies in indexing the loans with the price level of a basket of commodities, so that as the loan is returned it is the value of the amount borrowed which is paid back and not the face value of the currency which has nothing similar to what was lent except the meaningless figure of the loan expressed in a certain currency. The solution of indexation, however, is not acceptable to many present-day Muslim economists.

One reason presented against indexation is that such an arrangement would be ‘similar to interest [such] that it would be impossible to tell one from the other”.” I have already submitted that, contrary to the above claim, it is the very spirit of avoiding interest which compels one to suggest the solution of indexation. A somewhat similar stand was. earlier taken by the Council of Islamic Ideology (CII) or Pakistan against indexation whereby it was argued that it is a requirement of the shariah that the borrower should return to the lender the same quantity as borrowed, even though the price of the commodity may have changed.7~ That is, however, precisely the principle I am invoking, although to bring home just the opposite conclusion. Indeed, if money is to be accepted as a commodity with its own intrinsic value then the council’s view would have been correct. But if that is not the case -- and indeed modern-day money is not desired for its own sake but for the sake of the commodities it can fetch” •- then it can be safely concluded that the council has incorrectly concluded from a correct principle just the opposite of what it requires.

The second argument against the idea presented is that since inflation is the result of circumstances beyond the control of the borrower hence he cannot be held responsible for loss of purchasing power to the lender (Siddiqi 1992, 407). In response to that it could be argued that the erosion in value of the loans has not been caused by the either, so why should he suffer? In fact, the spirit of justice of the economic teachings of Nan demands that neither of the panics should suffer unreasonably. Interestingly, only a few lines later the author shows a complete reversal of opinion thus: “The extreme case in which very high rate of inflation renders a currency almost worthless is however, a case apart. In such cases it can be considered that now the worthless currency is a money different from the one in ‘which the loan was contracted. A formula establishing the ‘rate of exchange’ between the ‘new’ and old currency can be devised and all earlier loans converted to the ‘new currency accordingly” (ibid., 408). it is difficult to appreciate how a principle which under normal circumstances is rejected because it is seems to be unfair to the borrowers can be argued to be acceptable in extreme cases? Either the principle is fair or unfair. How can it be fair under one Set of circumstances and unfair under others? Moreover, who is going to decide if the inflation rate has gone high enough to be declared extreme?

A thin criticism on the idea of indention is that it “gives a privileged position to capital as compared to other factors of production which are also affected by inflation in one way or the other.” It certainly seems to be a valid criticism if the proposal confines the application of indexation to loans alone. We have seen in this chapter that (he economic teachings of Islam emphasize, more than anything else; implementation of justice in all areas of economic dealings. It is in that very spirit that the case of indexation of loans: is being pleaded. How is it possible that the proposal can overlook the equally unfair treatment of wages, salaries, and other contracts which arc confronted with similar difficulties due to inflation? Instead of arguing against the idea of indexation of loans, it should be urged that all other areas of payment affected by inflation should be covered by the proposal as well. One way of going about it in the case of wages and salaries is to ensure that alt public and private sector organizations should increase wages and salaries of, their employees every year at least by the percentage of inflation of that particular year.

A fourth criticism raised against indexation is that when the risk-taking investors are not assured of a stable real value of their investments, there appears no reason for savers and cash holders to be assured when they do not even take any risk (Chapra, op. cit., 40). The logic behind this criticism is that since risk-taken are not immune from losses, why should those who choose to avoid risk be saved against erosion in the value of their money? The obvious answer lies within the statement of this question: Since risk shirkers choose not to participate in the profits of business ventures, they have a right to get back exactly what they have lent and the risk-taking investors should face losses in difficult periods because in good periods they also take profits and, moreover, that is the principle they have chosen their capital to be dealt with in the real world the profit margins do normally take into consideration the risk element attributable to inflation involved in the investment. The same author admits a couple of pages earlier that Inflation undoubtedly does injustice to the interest-free lender by eroding the real value of his loan (ibid., 38). When it comes to the solution of the problem, however, he chooses to oppose the only workable remedy.

A fifth objection to the idea of indexation is that sometimes borrowers are unable to earn enough to return the real value of the principal to their lenders. In that case, it would be unfair to require the indexed-value of the loans to be returned (Khan, A.J., op. cit.). However, this objection can also be raised against the condition of returning the nominal value of a loan if the borrower has been unable to earn enough to do so. In fact, as mentioned elsewhere, Quraan urges the believer to forego the condition o demanding the principal amount as well if the borrower is in difficulty. Doing so, however, would be an optional act of benevolence on the part of the lender in exceptional cases. Under normal circumstances, a borrower is bound to return to his lender the principal amount. What’ is being argued here is that the principal amount which the borrower is obliged to return is the real value of the loan taken and not its nominal value.

The justification of indexation can also be viewed from the point of view of’ credit sales. Whereas pre-determined higher prices for; credit sates is undoubtedly riba if the deferred prices of commodities are forced to remain equal to spot prices in inflationary periods, it would be unfair to sellers and they would understandably stop making credit sales. After all, why should they sell at a lower real price on credit, when they can get a higher one on cash? If the answer is that the sellers should be allowed to charge the prevailing price rather than. the one which stood at the lime the possession of the commodity was transferred to the buyer, then it will be a solution based on the same broad principle which is applied in the case of indexation Why should that principle be allowed in one area of the economy (i.e. credit sales) and disregarded in others (financial credit)?

The rationale for indention can also be viewed from another angle. It has been pointed out in defence of the Islamic proscription of interest that money represents the monetized claim of its possessor to the property rights created by assets that were obtained through work or transfer. Lending money is virtually a transfer of this right, and all that can be claimed in return is its equivalent and no more. Interest on money represents unjustified creation of property rights because it represents a right claimed outside the legitimate framework of recognized property rights (Khan and Mirakhor 1987, 4). In case borrowed money is returned on the basis of the principle of indention, it represents neither the creation of any extra property rights for the lender nor the expropriation of some of those rights for him, as happens when some one lends interest-free Loan in an inflationary period, in fact, it would be an effort to enable the lender to receive back the equivalent of what he had lent. Thus the proposal of extending index-based loans appears to be the most acceptable to the spirit of the Islamic teachings of economic justice.

On the question of how to implement the principle of indention1 the suggestion of Khan (M.A) is worth looking into. He has proposed the floating of a new currency which can be used for all contracts involving deferred payment by one party to another. The value of that currency should be equal to a basket of commodities and it should be readjusted daily on the basis of the prevailing market price of (he commodities. Thus all borrowers should borrow and likewise return in that currency whatever may be its value in relation to the other currency. Likewise, all agreements of salaries, wages, and contracts involving payments over a period of time could also be agreed upon in that currency. He also proposes that the currency should have a single buying and selling rate to avoid speculation (Khan, M.A., op. cit., 6).

Despite the fact that the proposal seems quite promising, it appears to have at least one potential flaw which might wreck the whole idea: There appears to be no way suggested in the proposal to prevent the proposed second currency - which would assume the role of the store of value and, perhaps, legal tender as well -- from driving the official market currency from the economy. When two currencies are simultaneously allowed to operate, the more stable one will be preferred by all in every transaction and this would lead it to be virtually the commonly used currency at the expense of the official one. Thus a reversal of Gresham’s Law is likely to be experienced: ‘good money’ will drive out ‘bad money’. If any limitations on the supply of that currency were to be imposed, such a move would restrict its effectiveness in discharging the function for which it was proposed. If it is suggested that such currency notes would only be supplied to those who genuinely need them, then an unnecessarily large task of distinguishing the genuine demands from the non-genuine ones would have to be undertaken.

The proposal has, however, paved the way for further discussions and proposal for introducing proper indexation to protect asymmetry in the exchange of values in credit arrangements at different points of time. It is surprising that the writer who has presented the above proposal formally to introduce indexation is himself a supporter of the “arguments against indexation, both from the shariah and economic point of view.“ (ibid.). His subsequent attempt to introduce indexation is enough to undermine that statement.

There are other proposals as well to index loans. The proposal of Javed to give “Purchase Value Loans” in place of money loans by linking the purchase value with certain basic commodities, is one of them,” Indeed, if the principle of fair treatment for both panics is accepted, there should not be a dearth of proposals, It should, however, be pointed out that even if the best of indexation instruments are applied meticulously, there ‘will stilt be some variation in the actual value of the amounts borrowed and returned. Complete and total parity in the values borrowed and returned is neither possible nor should it be expected. What needs to be done is to secure as much fairness for both panics as is possible Allah does not expect from believers a behavior that is beyond their ability. Qur’an says: “And give in full measure, and weigh justly on the balance; no burden do We place on a soul beyond capacity” (Qur’än, 6:152),

ft also needs to be clarified that indexation should be employed only when money is borrowed either for business or consumption purposes, It cannot be used in. case money is given in trust for the purpose of safe-keeping alone, The reason is that while in the former case the borrower has made use of the current value of the money he obtained and should, therefore, be obliged to return the same value, in the latter the funds have remained unused, accruing no benefit to the possessor and, for that reason, should not oblige him to return anything to the owner except the face value of the funds entrusted to him.

The decision of Sindh High Court in Pakistan in the early 1990s to allow repayment of a loan on the basis of indexation rather than interest is a judicial recognition of the validity of indention at the judicial level as an acceptable principle for repayments of loans.

Receiving Favours from Debtors
Another important clarification made by sunnah with regard to interest is that the creditors are required to refrain not just from accepting back any value more than the principal extended to the debtor, but should avoid all other favours ‘n the form of gifts or services which cannot be attributable to any other reason but the fact that they are creditors.

For instance, Anas Ibn Malik reports that the prophet, peace be upon him, said: “When one of you grants a loan and the borrower offers him a dish, he should not accept it; and if the borrower often a ride on an animal, he should not ride, unless the two of them have been previously accustomed to exchanging such favours mutually” (Al-Bayhaqi n.d., Vol. 5, 350). Likewise, the same narrator reports that the prophet said this: “If a man extends a loan to someone he should not accept a gift.”3 It has been rightly pointed out that this prohibition is not restricted to the few examples of favours mentioned in the above narrations but extend to any kind of favours which a tender receives from his borrower, even if it is apparently as insignificant as taking advantage of the shade of his walls (Saleh, op. cit. ,414).

[UmeAimon]

Salam all,


So many other complications in life already yet we insist on having more :lol:
I think if we just keep things as literal as they sound in case of orders given by Allah SWT our lives can become much easier.
Anyway here is how I understood the riba thats illegal/haram for us.
When we LEND MONEY to someone we DON'T have the legal right to ASK for MORE than the amount we have LENT anytime, just because we let someone borrow our money!
Anything that is out of this criteria does not qualify for Haram Riba. That's all. Please do let me know if this understanding is not enough.

jazakAllah

a sister

[shahalam66]

Dear Sister,

The instinct of interest is one of the most universal and powerful instincts of mankind. But look at 30:39 in a broader perspective. It suggests man to reason against his own interest. The emotions of 'disinterested' kindness always produce generous thoughts and noble feelings. :idea:

[latif]

Lending for gain is trading. The Quran has excluded trading from the purview of usury (2:275) Allah has stressed upon lending without interest by way of benevolence to those deserving charity. This I think is all about it. Verses 2/272 to 2/280 read together gives us clear perspective of this issue.

Muhammad Latif Chaudhery

[UmeAimon]

Salam brother Latif

I didn’t get how you reached there.

Lending is allowing someone to use something on condition to give the same thing back as it is or some thing equivalent in case it’s lost.

Usuary/interest is over/more than the amount lent.
A charity is something one does not ask back!

Trade involves exchange of goods and services.
That’s universal!

So lending for gain is asking for your amount plus more!! which is not allowed 2:279.
It's NO trading!

A loan only becomes a charity when you simply write it off in favour of the deserving debtor. This is what Allah SWT is saying in 2:280.

In other words the creditor has no right to ask for more than amount owed, if he is to claim for the amount he lent as such too. Other wise it's not lending!

The halal riba in Quran is gain in commerce/ trade i.e. buying and selling goods/services. Lending for only gain is NO trade!

jazakAllah

[latif]

My dear daughter
May Allah bless you with peace and plenty.
I am neither a financial expert nor have the ability to complicate things. I try to understand Quran with reference to context taking into consideration the facts or circumstances that surround a situation or event. Now if we take into consideration the subject matter discussed in the verses ( 2:272-280), encapsulating the term Al-Riba ( not riba) we abruptly jump to the conclusion that Allah is talking about helping the poor deserving charity/interest free loan. Reading these verses again and again I do not find any hint towards economic policy or fair business practices introduced by the learned scholars The only message we get from these verses is “do not make money at the expense of those deserving charity”. The rest is history.
Allah know better.
Muhammad Latif Chaudhery

[Mohammad Rafiq]

Will some one explain how Riba applies to 1) Mortgage Loans, 2) money invested in Mutual Funds and/or stocks?

[latif]

Will some one explain how Riba applies to 1) Mortgage Loans, 2) money invested in Mutual Funds and/or stocks?

The point is why are we asking untoward questions when Allah has explained the situation and circumstance under which earning against loan is forbidden. Verses 2:272 to 2:280 encapsulating the term Riba does not of business or commercial enterprises. The borrower spoken of here is a poor person who may or may not be able to pay back the loan. According to Quran. prohibition of riba is not limited to usury.It also imply giving up of loan as a charity if the debtor is unable to pay. This cannot obviously be applied on commercial loans.

Allah know better.
Muhammad Latif Chaudhery

[bkanwar2]

Brother, I posted above but probably did not elaborate enough. You need to understand real meaning of three words used in Quran.
1. Riba
2. BayAAa
3. Tijara.

1. Riba, according to Lane book1, page 1009=He gained, or made gain, or profit, in his traffic. NOW THIS MEANING IS MORE COMPREHENSIVE THAN JUST INTREST.

2. BayAAa= spot trading, now will be shopkeeping bussiness.
3. Tijara=commercial trading=export/import.

Now Allah is saying Riba=profit=gain is prohibited and trading shopkeeping is allowed. Now one wonders than what is the gain one can have in this shopkeeper bussiness.

Answer to this gain is given at number of places. For anybody the gain is only what they worked for. Gain is only equal to labour put into business and not on capital itself. Please reflect on these thoughts. Meaning and implication of prohibtion of Riba are far wider and broader than just only intrest on loan of any kind. It also incorporates excessive profit taking, a very common practice by our very so called religious bussiness community under the name of Allah and Quran. Hope this helps further.

Badar Kanwar

Here is link to relevant page on Lane's book for your review
http://www.studyquran.co.uk/PRLonline.htm

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a subst. ($, I~.) A poet says, (S,) namely,
Khufif Ibn-Nudbeh, (TA,)
aor. , (Mob, I,) inf. n. 5o (Mgh, Msb, TA)
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made gain, or profit; in his traffic; (MA, KL,
Tg;) i. q. l, (. , ,) or , 1. (Az, Isb.)
The Arabs say to a man when he enters upon
traffic, :L.J41 C0J [(With gaining and liberality.]
(TA.) - And i1;3 j I (A, Msb.
TA) His trafqic brought him gain, or profit.
(Myb, TA.)
S. A j: see 4. Also , inf n. ,
ti took to himself (.3jl) an ape (Cti, TA) in
tis place of abode. (1.)
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the condition that the gain, or profit, should be
·a,
[dirided] betwecn them two. (TA.) And --'-
XA1t- tllI (,*' Msb) I sold him the commodity
naming a certain gain, or profit, for
every portion of the price: (Msb:) you say,
[I sold him tihe commodity on the condition of my
receiving as gain, or profit, upon every ten dirhemns,
a dirhiem]: (TA:) and . a , 1
bought it of him in like manner: (Msb, TA :)
the gain, or profit, must be named. (TA.)
See also 4.
4.-4J 43; tl . Ie found a p,(!fitlblc
marhket in [or for] his traffic. (Az, Msb.)
.t1 IIe gave him gain, or profit: (Mgh, Mb :)
* ~ .owe have not heard; (Mgh ;) [i. e.] ,
as meaning I gave hi,n gain, or profit, has not
been transmitted [from the Arabs of classical
times]. (Msb.) You say, '.:L ~ .;1,
(s,) or Wk& d ';.$j, (A, [,) or both, (TA,) I
gatpe him a gain, or profit, upon his commodity.
(S, A, ]Z, TA.) And I 4 .ojI [Ile malde him
to gain by his commodity]. (TA.) And
:se 41 [God made, or may God tnal e, his sale
to be productive of gain, or profit]. (S and 1. in
art. .j.)m Also .j) lie slaughtered for his
guests young rreaned camels; (1], TA;) which
are ealled C'. (TA.)- And ijl J cl Ie
nilhked the she-camel in the early morning, or
betwreen the prayer of daybreak and sunrise, and
at mnidday. (1].)
5. HHea sottght gains, or profits. (A.)
lie (a man, TA) was, or became, confounded or
perplexed, and unable to ee his right course. (V.)
G and t=p and tt, [all originally inf. ns.]
Gain, or prqft; (IA;rE, , A, ], and Mgh in explanation
of the first and last;) increase [obtained]
in traffic; (TA;) excess, or surplus, [obtained,]
nboe the capital [(xpended]; wherefore it is also
termed %.-. (Ksh and Bl in explanation of the
first in ii. i5.) [Hence,] t4 la 3 '&j--
S [Piety Jis the best traffic in respect ofgain, or
profit.] (A.)
: see the next preceding paragraph.
Horses and camels that are brought from one
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*
r a 1 W
..- 3, J &, *J~
G~ AJ~iid I~J
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the tribe liced, by means of tawnty-coloured
gaming-arrons whereby the lots that determined
who should afford the entertainment were divided]:
(S,* TA:) but [this is inconsistent with the affixed
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camels; (F, K, TA;) [as a quasi-pi. n.;] and its
sing. is 1 !;; ( ;) like as that of is
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youny weaned camel; [like .;] and its pl. is
tQ,: (K :) or it means here the gain, or profit,
obtained by means of the game called .cJi.
(S, TA.) _- See also the next paragraph.
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di:l. var. of ;. (S.) [See also t and '¢.]
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the latter; (K;) as also Vtt'. (TA*r,].)
See also rt,; first sentence. -Also A certain
l,ird, (, ,) resembling the Cl; [which is an
owl employed for catchling hawks]: or, accord. to
Kr, the word is *., and signifies a certain
bird resembling the tlj [or rool]. (TA.)
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small aninal, resembling the cat. (So in many
copies of thc S.) F observes that J says, tC l
;jWll ik* = JC ~'; BOand that , has been
substituted as an amendment for 4,. in some of
the copies [of the S]; but that each of these
r eadings is erroneous: for ,~Lv we find [in
copies of the S] in the handwriting of Aboo-
Zekereeyh and that of Aboo-Sahl %.t~., with
dithe unpointed t; and the substitution of A for
a43 was made' by IKt: in the copies of the S,
moreover, we find '.* instead of 4: and IB
says that the passage in J's original copy, in his
own handwriting, runs thus: LVJ L r 0
.jl3tl "o 4j4 ~jg.. (TA.) [But I find
that, in five copies of the S, between jj;.JI and
,e.t, occur the words ,i LWI. Ctljt, or .,
or ,jJ .,]
ssete: tli
: see 1 y
A. certain hind of camphor: (1s :) so
called in relation to a certain country, or town,
agreeably with what is [said to have been] amerted
by J, or to a certain king named t,, who applied
his mind to this kind of camphor, and discovered
it. (TA.)
tC1; (A'Obeyd, , A, L, V) and *t~j, (A,TA,)
the latter of the dial. of El-Yemen, (TA,) and
(L, TA,) The male ape; (?, A, L, K;)
[simia caudata, clunibus nudis] or the young one of
an ape: (TA:) or apes [as a coll. gen. n.]:
(TA in art. p.., in explanation of the last,
which is there said to be originally/l .),:) pl. of
the first C, . (TA.) One sayas t, ' .,
and g,, meaning [Prettier] than the ape. (A,
TA.) - [IIence, app.,] C :t ,.j (Lth, A, ]) or
~ (A) A sort of dates (Lth, A, ) of El-
Ba.rah. (Lth.) - Also, (IS,) accord. to some,
(TA,) Ct0 signifies A small young eaned camdl,
(Is,) and nmall young camels, syn. 4t., (TA,)
slender in the bone and meagre in the body:
(1:) but AHeyth asks, How can it mean small
young weaned camels, seeing that a poet applies
to it the epithet .i , and the J.; is five years
old? and Khidash Ibn-Zuheyr, in a verse cited
by Sh, speaks of a ct breathing hard in labour,
in order that her young one might come forth.
(TA.) _ See also a'
b; ·_ and t t Traffcking in which
one makes gain, or profit; (TA;) and so jI.
X1.2l; (T, $, A,* Myb, ;) [lucrative, or profitable,
trqaic;] a phrase like.)tU; Je and At#
meaning "a nighlt in which one sleeps" and "in
which one is wakeful :" (Az, TA:) and
V b a sale in which one makes gain, or proot
(TA.) And JL t, ; Property having gain,
or profit: 12 in this case being like ,¢ and
y.U: occurring in a trad.: but some read [,Ij,
or, more probably, '., from l i,t]h U [or
rather .]. (TA.) - See also 5.
: see the next preceding paragraplh.
1. 0,, ((, M, Mb, (,) aor. ', (~, L,) or ,
(Mqb,) inf. n. , ($, L, g,) or *, (Mqb,) He
remained, stayed, dwelt, or abode, (?, M, L,
Mob, 1,) it4 in a place. (f, M, L, MOb.) -
· p;(, lAr'$, lM, Mqb, g,) aor. ', (M,) inf. n.
,h, (T, M, Msb,) He con;fied; kept close, or
within certain limits; or shut up; (IA'r,T, ?,
M, Msb, 1 ;) him, or it; (IAr, ?, M, Mb ;) or
camels [&c.]. (M.) - He tied camels. (A, TA.)
- Also, (TA,) or *t. , (so accord. to the TT,
as from the T,) [or ".l ,.#,] He stowed, or
packed, datas, or the dates, in 51l, ie. oblong
pieces of matting [of mven palmeaves]. (AA,
T, TA.) [From what here follows, and from the
usage of the part. n. ,1.' (q. V.), it appmars that
the former verb is correct; but the latter may be
so too, or may have an intensive signification.]
127
BooK I.] 1009

[UmeAimon]

Salam All,

Dear brother Latif. Allah makes orders as simply and directly as He has declared in the Book!

The reason I gave those definitions was that this is what is understood by these terms, universally and also given and confirmed in Quran.

What Allah SWT has told us specifically is to spend (give charity) on poor and deserving in 2:272.

He did NOT say, give them loan BUT charity specifically! AND giving loan even without interest is NO charity.

Mere mentioning of usury after charity does not make AlRiba usury for poor only.
Neither the addition of Al with riba makes it that kind of riba for poor only. That is what you are only assuming dear!

It simply with Al because this kind of gain is specified as not halal and explained in 2:279. Allah ordered not to take or ask for more than amount lent i.e. the amount/capital which was meant to be taken back without mentioning from poor or rich like he did in 2:272!

Again please remind yourself this is no charity, about which Allah SWT is telling us to give to poor in many verses and in 2:272.


Taking step by step...All of this is confirmed by the verses that follow also negating all you assumptions.

2:275

“On the other hand there are those who eat AlRiba. In greed of money they run around like someone who has been bitten by the snake. They say usury is like trade. That is not so. That is why Allah in his infinite wisdom has permitted trade and forbidden usury...”

Your first assumption is that as usury is mentioned with charity, so since charity is for poor, Alriba is also for poor.

Here Allah SWT is mentioning usury (Alriba) with trade(Al bayea’), so if we go according to your understanding, here trading can be taken as with poors only since it is mentioned with Alriba. And so as Riba for purpose of trade is halal according to you, we can say some kind of usury is halal from poor too!

Now again reminding what you said about use of AL emphasises it is the kind of riba that is for poor people only! (In fact it’s just for emphasis, that’s it) :

Here Allah SWT specifically said “They say usury is LIKE trade “.
If Alriba is different from any other kind of Riba then the verse should have been “they say this Alriba is LIKE any other riba.”

And instead of saying trade is halal and Alriba is haram simply “that riba on trade is Halal and from poor is Haram (and that too not when trading with them according to your understanding)”.
:)
But Allah used word trade which has totally different meaning. The fact that Allah’s distinguished trade from usury, making one halal and other haram specifically and saying they are NOT same, without going in detail which kind of riba or which kind of trade, simply means usury is NEVER a form of trade!!

These points are further confirmed and detailed in next verses in which Allah wants us to take back only the amount/capital given, without mentioning whether given to poor or needy or anyone else so simply we take back what we give!

Verse 2:279 is for that Alriba/usury (So Alriba: extra gain from things that are lent, that are to be taken back! Not any other kind)

And last not the least in the verse following the subject...2:280

It says when the debtor is in trouble...
Now according to your understanding we were talking about poor people only since Alriba is being discussed here.
That means debtor here means poor deserving one only and first we can give loan to him without interest and if he can’t pay back only then we are supposed to give him charity!!

But dear if debtor is needy/ deserving, he deserves charity NOT loan!! As Allah says in 2:272 and many others.

And it makes sense. A poor or deserving person who needs debt means he is already in trouble and a needy one! So here debtor can’t be just poor person (neither Allah mentioned) but anyone who took loan for something and cannot return for some reason. So NOW he is also needy, and for needy the order is consistant!

So what has been explained in 2:280 is again same for needy people i.e. letting go of the money altogether, to give charity NOT loans without interest!!!


jazakAllah

[UmeAimon]

Salam again,

All praise is for Allah alone...
Brother Rafiq how I understood, the fact that Allah SWT did not condemn interest giver is reason enough to make home mortgage halal; because the person simply may not have any other option otherwise; will he?

For the rest, simply if you are/were/will be not in position to claim and/or ask for the whole or original capital/thing back, it’s not lending but can be like a partnership, so can be halal!

Easy to understand anything from this side. But please let me know if it doesn't work in some situations.
Allah knows it all

sister

[Anya]

My greetings.

It is noteworthy that when the Quran addresses humanity on the question of riba, the person giving the loan is addressed. The person giving the loan is in a position of (financial) power, and the Quran therefore directs that such power not be used for the exploitation of any person who is weaker (such as a debtor). This ties in with the underlying structure of the Quranic system - to promote inequality and to avoid imbalances in power which would lead to the exploitation of the weak to their detriment.

The rules pertaining to Riba are quite clear: any interest on a loan which is given to a debtor who is obviously in a weaker position must be limited, if not forgiven completely. However, the injuction is on the lender to ensure that he does place an undue financial burden on the debtor.

Generally, under the so-called "Islamic" laws, all forms of interest are outlawed, and both the debtor and the lender are lumped together and consigned to hell. It is clear that many of the proponents of this interpretation did not read the Quranic verses closely and/or lacked the financial knowledge to interpret them correctly.

It may well be that a person can afford $1000 a month to pay for accomodation - if this goes towards rental, then according to the "Islamic" law, this is permissible. If it goes towards the payment of a mortgage bond, it is forbidden. The nett effect of this interpretation is that the person will be a tenant all his life because he cannot obtain an interest bearing loan to acquire an asset. It is clear that this situation is irrational.

The traditional interpretation and application of the concept of The Riba has also led to an ever-increasing industry known as Islamic Banking. Various structures are created to "circumvent" the Riba provisions in the Quran based on traditional interpretation, and ever more elaborate business and lending structures are created.

However, it is always better to disect a transaction in order to get to the root of it - then, it doesn't matter what label you give to the transaction, the elements of the transaction will clearly identify its nature.

I came accross a transaction not so long ago where a relatively poor person wanted to buy a house. She was advised that she could not obtain a mortgage bond as this was unislamic. She therefore approached an islamic bank and was told that they would purchase the house from the old owner, add a profit and then sell the house to this person at the higher price. The purchase price would be paid off over a period of time. On analysis, it transpired that if the person went to a commercial bank and obtained a mortgage bond, she would have paid significantly less for the house. In my view, the transaction structured by the islamic bank was nothing more than a loan disguised as a sale. Their guaranteed profit was significantly higher than a commercial bank would have made had it advanced an ordinary loan with interest (mortgage) to the woman. It is my view that this woman was in a worse off position because of the "Islamic" law. This is clearly exploitation, which is unjust and therefore against the very fundamentals of the Quran.

If the Riba laws are interpreted correctly, it should manifest, to my mind, as follows:

[list]a poor person deserving of charity should be given such charity if the lender is in a position to do so (in other words, the loan is forgiven, or out-and-out charity is given).

If the borrower is not so poor as to deserve charity, but the charging of any interest would place undue hardship on the borrower, or the loan is required for something basic (such as housing), then only the capital sum should be repaid by the borrower (the lender should not charge any interest).

Where it is an ordinary commercial loan, the lender should be able to charge reasonable interest (as this would not amount to exploitation), given the market ruling forces at the time, and to cover the cost of doing business and the prevailing rates of return on investments. At no time should an exploitative rate of interest be permissible, even if the debtor could afford it.[/list]

It might also be mentioned in passing that many legal systems throughout the world regulate the lending industry - some do so by capping maximum interest rates, some stipulate the manner in which loans may be advanced, etc. All of these laws are usually geared towards ensuring that there is no exploitation through the charging of excessive interest rates. This avoids undue impovrishment due to the fact that more of a person's income is required to service debt. Excessive debt in an overall economy also leads to stagnation in such an economy, as consumer spending, which often is the driver of growth and prosperity in an economy dwindles, thereby leading to business scaling back, leading to job losses and a contraction of the economy.

Therefore, it is in the interests of all, both on a personal level and on a larger macro-economic level, to ensure that the balance is maintained: there should be no exploitation of the poor but there should be room for reasonable interest rates otherwise people with money will not lend their money as there is no prospect of a return - they would rather then invest the money. This would in turn lead to those who require loans not having access to funding, which will have the effect of making whatever little money there may be available for lending to attract higher interest rates (too little money - too many borrowers: the lender can charge higher rates of interest [based on too little supply and too much demand] which may become exploitative).

[UmeAimon]

Salam all,


Dear Anya, Allah SWT orders are straight forward!! So far I don't see any KIND of Riba halal in Quran although brother Latif TRIED to find the exception but that did not prove to be right. Please do let me know if you find any to support your arguement so I am convinced too.
You are right about this Islamic banking. But dear the problem is in the your own words "...The lending Industry..."
No I didn't forget to write more, this is it...........it shouldn't be!

jazakAllah

[latif]

Dear Ume Aimon
Assalam-o-Alaikum
Thank you for elaborating your point of view. Any one depending on literal meaning of words without reference to the context will say the same, though it has not augured well with majority of Muslims and the usury is prevalent in all Muslim countries on one guise or the other.
Just look at the sequence. In verse 2:270, 271, 272, 273 and 274 Allah speaks about charity and those deserving charity. In 275 Allah abruptly says No more interest. You are entitled to get back your capital alone. (This points out to second source of assistance to needy ones i.e. lending/borrowing) In 2: 276 Allah says we intend to curb usury and promote charity. Verse 278 & 279 is again a warning to hesitant. Verse 280 tells us, to wait for a better time and give up the loan as a charity, if the debtor is unable to pay. This tells us that Allah wants us to promote firstly charity and secondly lending without interest. The question is to whom? The logical interpretation of these verses is to needy ones, deserving charity and or lending without interest. The difficulty arose with the indiscriminate application of this command and intermingling fair business practices with Al-riba.
Allah knows better.
Muhammad Latif Chaudhery

[UmeAimon]

Salam Brother Latif,

Perhaps you did not read all of my post otherwise you would not have said what you have. I have never left the context while understanding Quran alhumdulillah and in my post I even assumed your conceived context all the way to reach the conclusion. Your perception itself gets denied in the passage when the message is taken as a whole and within the context and also from the big picture of Quran, as brother bkanwar pointed out.

Anyway Allah does know the best and He was never short of words specially in case of orders and haram things and that had made my life easier!

One more thing only... just because we humans are too ignorant and lazy, to gain from other sources that involve some work and of course risk AND we spend our lives working and saving money so we can finally retire and eat riba from the already accepted, established and ever growing "Lending Industry", because thats all we could do and in the mean while never stopped to think nor had any intentions to think about any alternative..., we cannot change whats very obvious.

But, like Allah says, no compulsion in religion!
:roll:
May Allah guide us all in the right path.

jazakAllah

[latif]

Respected lady Ume aimon says

“One more thing only... just because we humans are too ignorant and lazy, to gain from other sources that involve some work and of course risk AND we spend our lives working and saving money so we can finally retire and eat riba from the already accepted, established and ever growing "Lending Industry", because thats all we could do and in the mean while never stopped to think nor had any intentions to think about any alternative..., we cannot change whats very obvious”.

May be she is not in a position to realize but to me debarring people from making use of their hard earned resources is not in line with the social justice of Islam. I just do not understand why the term riba has been annexed to money alone. Lending /borrowing could be of anything but as a Muslim I can hire men, material, machines and tools but I cannot hire money despite the fact that money today is more susceptible to devaluation than the depreciation of material goods. There is no denying a fact that creating an atmosphere of exploitation and indulging in bad business practices is not appreciable in any society as making money from those deserving our help by way of charity is haram in Islam, But why are we averse to lending of funds in free market where borrower is free to choose from a number of alternatives. What alternative will the respectable lady suggest to an 80 years old retired government servant who has nothing more than the savings of his hard earned remunerations which he can either eat up in a few days or invest in some lending industry to earn him Dal Roti and dawa daru . Now if any transaction not involving the element of labour is haram then the money one saved was not earned without toil. If any transaction not involving risk is haram than gambling is perhaps the best of all. What seems reasonable nder all circumstance is the term riba interpreted as exploitation in every sphere of life.

May Allah help us understand his commands.
Muhammad Latif Chaudhery