Performance in man’s daily life is define only in
the will of Almighty Allah. Holy books and
messengers were blessed and send to explain evil
& sins, losses & gains, health, hygiene, wealth
and happiness for mankind.
For better humanity Allah define limits of
everything that the men have in this daily life.
Men have been bless unlimited power by
achieving knowledge that can be stored in human
mind & act according to an organize system that
is clearly explain in
Holy Quran, Hadiath and Sharia'h
PRIME IMPORTANCE FOR MANKIND
Almighty Allah prohibited any object or
any act that is harmful to humankind
that creates instability, bring
injustice, become injurious to human
life and considered as unconstructive
Socio Economic System.
Riba is an Arabic word drive from word
RIBH which means Profit.
Ribh means excess, increase or addition in
accordance to the Islamic guidance for
commercial & business practices &
correctly interpreted according to Sharia'h
RIBA is any earning, income, profit or benefits
being earned, taken or received through wrong
means, bad intentions, shady practices or wicked
Riba is not only treated as immoral, unjust
filthy but furthermore threat to SOCIO ECONOMIC
LIFE OF SOCIETY.
Riba leads to crimes of various nature, through
Cruelty, Humiliation, Exploitation, Self-
importance, Discrimination, Power, Lust
Selfishness, Greed and self-esteem
Riba is as a combination of evil and sins.
Riba is bad practice to earn & gain.
Riba bring instability in the community life.
Riba is the source for the increase of inflation.
Riba create classes in the society.
Riba create injustice in seeking the rights.
Riba is non transparent economic activity.
Riba is the most hated practice in Islam
Riba is a social crime
Immoral, Unethical, Unjustified
Commercial, Economical, Trading,
Business, Political, Social, Cultural
and traditional practices and
activities to gain benefit
Institutional level 8
People who indulge in Riba shall be raised like those who
have been Driven to madness by the touch of Devil.
That is because they say that Riba-based transaction is
just like trading, while Allah has permitted trade and
prohibited Riba. Hence those who have received the
warning from Allah and have stop accordingly, may
have what has already passed, their case being entrust
to Allah but those who revert to Riba-based dealings,
shall be the inhabitants of the hell-fire and abide
therein for ever. (You must know that) Allah deprives
Riba from all blessings and blesses charity; He loves
not any ungrateful sinners.
O you believers!
Fear Allah and give up Riba that remains outstanding if
you are true believers.
Watch out! If you do not obey this directive, then Allah
declares war against you from Himself and from His
But, if you give up your outstanding Riba, then you can
claim your principals. Neither should you cause harm
with Riba to others, nor should others harm you.
Prophet Muhammad (May Peace Be Upon Him)
Said At the last Pilgrimage,
All Riba of Jahilliya is null and void. In this
respect, the first Riba I (May Peace Be Upon Him)
withdraw that the borrowers owe to my uncle
Abbas; it is cancelled completely. (Muslim)
The Prophet (May Peace Be Upon Him) cursed all those who
take Riba, who give Riba, who write a Riba
contract and the two witnesses to a Riba contract.
He (May Peace Be Upon Him) further said: "They are all alike
(in fault).“ (Muslim 2995)
CONCEPT OF QURANIC RIBA
RIBA IN FINANCIAL AFFAIRS
Riba must be eliminated from the financial
No thing is more horrific as compared to Riba
that Islam has prohibited.
Nothing is more dreadful than Riba, is remains
in widespread threatening socio economic
activities in both theory and practice.
Riba convert financing system into lending
system that make the money as a commodity and
owner of the wealth, a seller and user of the
same as buyer.
Riba does not justify money to be a medium of
exchange and brings the love of money instead
of respect for the money.
When money become a commodity and
bought and sold with guaranteed results
Or the increase volume of money by using
in the transaction.
Such increase is the price of the money.
This price of the money is classified as
Interest which is the part of Riba
There is confusion in understanding for the terms
Interest & Riba (Usury). 13
THE QUESTION ARISE “INTEREST IS RIBA
OR RIBA IS INTEREST”?
To make a distinction of terms with
Islam through definitions and
interpretations, provides explanation
in Holy Quran and Hadiath,
Riba is clearly explained where Interest
is define by the scholars.
ABU ALA MAUDUDI
Interest is an earning through lending on
money by lender from borrower on
condition that lender shall charge a
fixed amount of money in addition to
Interest is prohibited in Islam and people
are not allowed to make money by
lending their capital on interest.
Capital is to be invested in productive
manner that increases the profits. 15
GREEK SCHOLAR ARISTOTLE
He define Interest in his book “Money & politics”.
“Interest is an artificial profit, which does not enter in legal
trading. Using money as a commodity is selling, just a
forged artificial transaction.
Money has to be used as a means of sale and purchase and
a measurement of a commodity to be sold or purchased.
Money is just a means to ascertain value of commodity and
it cannot be sold or purchased within similar quantities
and qualities ”.
HOW TO DEFINE INTEREST
Any amount, earning or income that is taken over
and above to PRINCIPAL AMOUNT, without any
RISK, EFFORTS, ACTIVITY, WITHOUT LOSS SHARING
and the RETURN IS GUARANTEED within a SPECIFIC
TIME is called INTEREST.
This compulsory return, income or earning on a
fixed term & fixed percentage, upon principal
amount, is an INTEREST.
INTEREST IS THE PRICE OF MONEY
Whereas money is just an intermediary between
exchanges of transaction.
There are many categories of Riba.
INTEREST is one of the categories of Riba.
PROCESS OF INTEREST IN 5 ACTS OF RIBA
INTEREST is one of the categories of Riba
Five acts of Riba develop the amount of Interest.
1. Exploitation of lender to borrower
2. Non Transparency (purpose undisclosed by
borrower to lender for lending)
3. Guarantee for successful maturity by
borrower obtain by lender.
4. Humiliation by lender on non performance of
borrower on maturity.
5. Cruelty by lender by liquidating and making
physical harassment to borrower.
Prophet Moses(May Peace be upon him)
Torah 22nd versus of the
If you lend money to any of my people with you
who are poor, you shall not be to him as an exact
Riba from him.”
“You shall not lend upon Riba to your brother, Riba on
money, Riba on virtual, Riba on anything that is lent
'If one of your countrymen
becomes poor and is unable to
support himself among you, help
him as you would an alien or a
temporary resident, so he can
continue to live among you.
In several Biblical passages in which the
taking of interest is either forbidden,
discouraged or disliked.
The religion of peace and love define
Interest as the key to cruelty and hatred
and give birth to crime.
Roman Catholic Church
In fourth century AD prohibited taking of
interest by Church Scholars.
In the eighth century under Charlemagne it
was declared usury to be a general criminal
"The love of money is the root of all
evil." (Timothy 6:10)
Ancient Hindu Religion
Vasishtha, a well known Hindu law-maker made
a special law which forbade higher castes of
Brahmans (priests) and Kshatriyas (warriors)
from being usurers or lending at interest.
Vedic texts of Ancient India (2000-1400BC)
In the Jatakas, (600-400 BC) Usury is referred to
in a humiliating manner:
“Two-Faced Elites accused of practicing Usury”.
Islam for Money Matter
Riba does not justify money to be a medium of exchange
and develop the love of money in several ways that
disrupt the entire system of mankind.
Islam stresses a respect of money by disregard
lending and borrowing
Islam guide to financing on participation by uniting
money with skill as equal in volume against value by
making effort, utilization and participation in gaining
Islam for Money Matter
Islam guides the point of origin and limit of destination
of monetary transaction.
Islam defines duties and responsibilities between
money owner and money user.
The combination and participation of money and effort
brings the result which is share according to the
pre-agreed terms of understanding is the
creation of Profit
How it is Describe?
Income is determined not on financing amount,
but Principal amount taken out from Sales
Proceeds , realizing Gross Profit which is
subtracted with Cost on the transaction which
end into Net Profit which is the aim of financing
with “Acceptance” of loss.
To work out the profitability in the transaction
APPRAISAL, PRECAUTION, TRUST, CONFIDENCE,
EXPERIENCE, KNOWLEDGE, PURPOSE, WILL &
SPRIT are the factors of BUSINESS ETHICS that
result in realizing PROFIT on the transaction. 26
Profit is an amount appreciate over & above to the
principle amount in acceptability of profit & loss
sharing between two partners of the transaction
upon the maturity as GROSS RETURN.
This gross return over to the principal amount of
investment then be deducted with applicable and
agreed Cost on the transaction which realize the
NET INCOME on the transaction.
This Net Income which is to be shared in an
agreed RATIO instead of confirms and guaranteed
rate is the Profit.
PROFIT is sharing in RATIO of investment and not realize
through RATES applied on principle amount.
Now the question arises
If Interest is eliminated from monetary system,
would it be possible that system & transactions
would become transparent and clear?
Answer is simple and straight:
“Filth remains in its hard and powerful grip
irrespective of other factors”.
Interest alone cannot be eliminated without
eliminating categories that fall under term
Some of the categories of Riba are
mentioned and clearly defined in
Islamic Economics System . Islam
strictly prohibits these acts as well as
society disregards them as Social
Crimes due to their dreadful effect on
social, moral, cultural, economical,
financial, commercial and lawful life
styles of the society. 29
Categories of Riba
The main classes of RIBA
Exploitation by taking advantage of status and
Irregular weight & measures for profitability,
Wrong declaration for higher return,
Crime & Law breaking,
Commit a breach
Manipulation of affairs for benefits at a
cost and efforts of other,
Gambling in all form,
Promising to secure the benefit by
covering honorable, nearest, dearest
Falsehood and Lies
Betting and gambling
Speculation, Conjecture, unfounded
Trading in commodities prohibited by
Islam and law of the land,
Income from the practices or activities
that are prohibited by Islam,
Breaking and abuse of state law for self benefit or
for any purpose that is declared as punishable
Disobedience to the state law by declaration and
submission of wrong information for self-
Disturbing peace of community by using force.
Committing and involving in the illegal acts.
Paying and receiving Interest that is declare as
price of money using act of cruelty, exploitation,
wrong means, false declaration, and advantage
based on weak or wrong calculation,
Taking and giving return on loans or fixing
amount without appraising the use of funds that
are given to user. 32
Keeping deposit with person or institution
having involved in Riba practices,
Using deposits as investments and declaring
non-transparent results that lead to
discrimination of sharing in accordance with
Holding and storing of currency that affects
economic activities negatively.
Holding commodities that lead towards scarcity
in the supplies against market demand.
Monopoly and monopolization of activity,
transaction and business to taking sole benefit,
stopping the growth of employment and
Grabbing the wealth,
Illegal encroachment on the property that is not
owned by encroacher. Like construction of pray area
on the property not lawfully purchase, legally gifted
or transferred to occupant
Using public money for luxuries & self-usage,
Misuse of rights belonging to minors, orphans,
widows and women,
Misappropriations among share division on
Miscalculation of share for inherited wealth under
law of inheritance,
Income by power and cruelty,
Misuse of power and status,
Pressurizing and influencing of earning situation and
Misuse of public representation and obtaining benefit
through status as Public Representative,
Trade and Sale of commodity by charging over and
above to the prevailing price and avoiding payment to
state toward revenue, hiding such earning and income
Abuse of labor, specially child and women.
Above classes differentiate Interest vis-à-vis Riba
FUNDAMENTAL FACTS ON RIBA
BASIS OF ISLAMIC THOUGHTS CONFLICT DIRECTLY WITH THE RIBA
BASED SYSTEM. AS “NO ISLAM EXISTS IN A PLACE WHERE THERE IS
RIBA BASED SYSTEM”.
Riba based system is a misery not only on humanity,
faith, morals or imagination of life, but also in every
core of economic and practical life.
It is the most hateful system, which eradicates human
satisfaction and frustrates its civilized and neutral
Islam has complete ethical system supported by
realistic system as interlink.
Ethics & reality cannot be separated in Islam & cannot
be practiced alone.
FUNDAMENTAL FACTS OF RIBA
Islam has clearly stated benefits of following of
ethics and reality that followers follow in daily
Successful Islamic economics does not rise
without Ethics which cannot be separated to
reality of life and its rational approach.
Practical life of people cannot prosper without
Riba practices corrupt the individual’s ethics,
behavior, and feelings towards community and
It also corrupts the human life, culture and the
relationship by spreading the spirit of greed,
selfishness, sneakiness and gambling in general.
FUNDAMENTAL FACTS OF RIBA
Today investing capital on minimum risk basis
over guaranteed return is commonly practiced
including funds as deposit, invested on no risk
with guaranteed return.
Interest is paid at lower to the depositor’s
investment and higher to investment managers
Money lent to somebody on higher return or
interest does not grow useful projects but seeks
the most lucrative opportunity even if profit
comes from the lowest nature and the meanest
Islam is a connected system; it prohibits the
dealing with Riba.
It also defines all its systems based on providing
the need to it.
It organizes the aspects of social life on giving
out means of dealing without touching growth of
human, social & economic development.
A true Muslim should have a firm belief that
whatever Almighty Allah has prohibited, can
develop human life in better and fair way.
It must be kept as a firm belief to restrain from
false and evil acts for the betterment of life with
its development and growth in harmony.
Almighty Allah is the Creator of this life and
makes man, custodian to all the blessings for
Mans determination towards the Almighty Allah
overcomes all and guides the man to the right
It is also impossible for the Muslims to raise the
community in prosperity or the perception that
wickedness can show the way to advancement,
going against the prohibitions of Almighty Allah.
RIBA AL NASSIEAH
Riba al Nassieah practiced before Islam
as man paying his money to another for a
pre agreed period.
In return, he took from him a certain
amount every month without taking the
When date of payment came, he asked
him for his capital and if he was unable
to repay would increase in his fund and
the term of repayment.
RIBA AL FADI
A man sells an article in exchange of another
article having same quality and nature with
an increase or decrease like gold sold for
gold, rupee for a rupee, corn for corn and
barley for barley.
This kind is considered as Riba, as
commodities are similar to each with
different values not ascertain.
Such transaction has the involvement of
exploitation and injustice on any one’s part of
Riba system emerges initially on a rule that
there is no relationship between the
determination of Allah and the life of man.
Riba creates the false feeling in the mind of men
that wealth ownership would bring the power
to become the master of this earth. It instructs
the men to not to get bound by a pledge himself
from Allah and to ignore the importance of
following the commandments of Allah.
Riba establishes a feeling of liberty among
humans for ways and means of obtaining
wealth, encouraging to adopt more unfair
means to multiply it.
Riba provides an individual a feeling that he is
free to enjoy his wealth without abiding the
contract of faith and trust in Almighty Allah or
obeying any condition as holder of wealth, for
which he is not bound to keep the interest of
Gharar is uncertainty, hazard, chance or risk and
technically it is sale of a thing which is not present at
hand or the sale of a thing whose consequence or
outcome is not known or a sale involving risk or hazard
in which one does not know whether it will come to be
or not. Such as fish in water or a bird in the air which
are dishonesty through ignorance by one or more
parties to a contract. There are several types of
Gharar, all of which are Haram. The following are
Selling goods that the seller is unable to deliver
Selling known or unknown goods against an unknown
Selling goods without proper description
Selling goods without specifying the price
Making a contract conditional on an unknown event
Selling goods on the basis of false description
Selling goods without allowing buyer to properly
examine the goods
Gambling is a form of Gharar because the gambler is
ignorant of the result of his gamble