2. The price paid for borrowing money. It is
expressed as a percentage rate over a period of
time.
Money that is paid in exchange for borrowing or
using another person's or organization's money.
Interest is calculated as a percentage of the money
borrowed.
3. Interest also refers to the income, figured as a
percentage of principal, that you're paid for purchasing
a bond, keeping money in a bank account, or making
other interest-paying investments.
4. Real rate of interest
Simple rate of interest
Compounded rate of interest
Effective rate of interest
Note that any kind of interest e.g. simple interest,
compound interest, periodic interest, commercial
interest, money interest, interest al-nasiah, interest al-
fadl and so on, all are prohibited in Islam.
5. Interest is imposed to earn an extra benefit from the
investment.
So that if we invest an amount in any business we can
earn money.
Banking system is solely based on interest.
Banks gives interest so people attracted towards their
schemes and deposited their money.
6. Banks gives loan and take a higher amount of interest
and give a lower amount to the depositor , in this way
Banks make money.
People invest money on interest so the value of their
investments increases with time.
Firms give higher rate of interest so that they take
money when needed.
7. Use both as inter exchangeable terms
The literal meaning of interest or Al-RIBA as it is used
in the Arabic language means to excess or increase.
In the Islamic terminology interest means effortless
profit or that profit which comes free from
compensation or that extra earning obtained that is
free of exchange.
8. Hazrat Shah Waliullah Dehlvi a great scholar and
leader has given a very concise and precise definition
of interest. He says, "Riba` is a loan with the condition
that the borrower will return to the lender more than
and better than the quantity borrowed."
9. Interest is not a subject without trade and commerce.
Islam recognizes trade and commerce not only as a
lawful profession but also as a moral duty. Islam has
laid down a complete set of rules for trade.
The reason for these rules is to specify what halal
earning is.
10. It is very obvious that RIBA is not allowed in Islam at
all.
In Surah-Albaqra verse 276 ALLAH says
"Allah will deprive usury of all blessing, and will give
increase for deeds of charity, for he does not love any
ungrateful sinner."
Two verses later in verse 278 he says,
"Oh you who believe! Fear Allah and give up what remains of
your demand for usury if you are indeed believers.
11. In Surah Aal-Imran, verse no.130 Allah says,
"Oh you who believe! Devour not usury doubled and
multiplied; but fear Allah that you may prosper."
In the third place in Surah Al-Nisaa’ Allah states in
verse 161,
"That they took usury though they were forbidden and they
devoured peoples wealth wrongfully; we have prepared for
those amongst them who reject faith a grievous
chastisement."
12. Hazrat Jabir radiyallahu anhu has reported that the
Messenger of Allah sallallahu alaihe wasallm cursed the
devourer of usury, its payer, its scribe and its two witnesses.
He also said that they were equal (in sin). (MASHKAT)
Hazrat Ali radiyallahu anhu reported that he heard the
Messenger of Allah sallallahu alaihe wasallm cursing the
devourer of usury, its giver, its scribe and one who refuses
to give Zakat and he used to forbid mourning. (Nisai)
13. Today interest is well-known to all of us and has
become so institutionalized
Accepted in modern economies that it is almost
impossible to conceive that an economy can run
without interest.
Main harm behind the interest is the social harm.
14. The attitude of RIBA or interest also harm the nation’s
economy as people don't want to invest money in
business and wants to gain free benefit from depositing
money in banks.
15. Firstif a person or a nation wants to take or give
loan to other then it should be on “brotherly
principles” not on interest based.
2nd if any one wants to make money then he
should put his money on risk. It mean that he
should also have a share in case of loose.
16. Generally the poor and needy borrow from the rich.
In this situation the rich get scope to have extra money
in the name of interest because of the existence of
interest system.
RIBA is also not allowed in Christianity or in any other
religion.
RIBA or INTEREST make a specific society rich and
only they are the people who have control on whole
society. In this way they destruct life of poor's.
17. Today economy and banking system is totally based on
interest system. No business can run without interest
nowadays.
But interest rate give advantage to rich people and
large co operations on the other hand its not
beneficent for the lower level or small businesses.
Mainly ISLAM does not allow interest system as its not
useful for the whole society.
