IFG – Some good news and roadmap of future focus. What you should have done is to refrain from paying interest. Government can then spend that money on its programs. In part 2 of this article on why interest is haram, I’ll explore this line more fully. The value in a £10 note is that which we are willing to give it. 1. cantspeak. in reality a small interest pays for the work of lending money . 1; 2; First Prev 2 of 2 Go to page. Jan 21, 2017 #21 hodon said: what other comments? But what if, in our modern context, interest is arguably not even generally exploitative? in reality a small interest pays for the work of lending money . Post Preview. Why is riba prohibited? Actually, their revenue comes from the spread between lending and borrowing – performing the service of financial intermediation – and fees. They do not need our savings. I think it is an invention of Islamic scholars. You are entitled only to your principal   whereby neither you wrong nor be wronged. By … If one has renting out a gold coin (somehow back in vogue as a currency let’s say), we wouldn’t want the gold coin for itself, but for what nice things it could buy. If like in most west democracies inflationary targets are 2-3%. A rich person is one who has lots of money, and he is in a position to lend. Why Interest (Riba) is forbidden (Haram) in Islam. There is no such evidence in the Qur’an and any other evidences need to be understood based on the directive of the Qur’an. “Why does Islam forbid interest?” That’s a question we have all asked or been asked at some point in our lives. Answer to: Why is interest considered haram? *Salam Alaykum' Why Interest (Riba) is forbidden (Haram) in Islam. In an authentic Hadeeth of Ibn Majah, as narrated by Abu Hurayrah: The Prophet, said: “Riba has seventy segments, the least serious being equivalent to a man committing adultery with his own mother.” (Ibn Majah). Because people wealth is being worth less and cost of living becomes expensive each year, because of interest, Dear Ibrahim, UK Islamic Mortgages 2020: The Definitive Guide. 1. Therefore I reword your question as follows: " Whoever says it is allowed to deal with interest that is not usury has the burden to provide the evidence." https://www.youtube.com/watch?v=mICixMTW_qs, https://www.amazon.com/Ultimate-Conspectus-Matn-al-Ghayat-al-Taqrib/dp/0985884029/ref=sr_1_fkmr1_1?ie=UTF8&qid=1544802738&sr=8-1-fkmr1&keywords=matn+abi+shuja, https://islamicmarkets.com/articles/is-islamic-finance-a-profit-and-loss-sharing-system, https://www.islamicfinanceguru.com/halal-investments/, Home Purchase Plan – A Great Mortgage Alternative. I heard an interesting argument from yasir qadhi in the following video: Also called Riba in Arabic, it means an unlawful increase in the amount of money or commodity to be paid back by a borrower to a lender. Lv 7. That is why a standard trading account is haram, since its operation includes interest payments, but the Islamic trading account is halal, eliminating the payment of these swap interests. cantspeak. If you agree that there will be a $5 on top of a $50 dollar loan, then that's not haram. As can be observed from the above surah and hadith, interest has been declared void in its entirety, with no distinction of it being excessive or reasonable. Money is a store of value. check out https://www.islamicfinanceguru.com/halal-investments/ for a comparison of rates. What does one do in such cases where it is not (prima facie) exploitative? FilmMieux. good question – and there is an argument to be had there. This changed a few decades ago. I do not agree that risk must be shared. Nizar Alshubaily https://islamicmarkets.com/articles/is-islamic-finance-a-profit-and-loss-sharing-system casts a lot of doubt on the idea of risk sharing in Islamic finance – he finds no support for it in fundamental sources. Your Question: Why intrest is haram? Ijarah is another approach that is basically a rent-to-own type of transaction. On some reflection, there are 2 points I can make. Simply put Riba is the Arabic equivalent for modern day interest on bank loans and deposits. Why Riba (Interest) Is Haram- ᴴᴰ - Powerful Reminder. Alcohol, gambling, bribery are haram for both rich and poor. Answer #1 | 13/09 2015 09:29 because interest is making money just out of money .money should only come from work or exchange of property. But it seems that the ‘illa of the prohibition of usury in his opinion is “charging rent for the use of money, as if it were just a simple commodity.” This looks like it’s the same as your New Argument, right? I have also heard arguments that concur with this in the following text: Matn Abi Shuja (https://www.amazon.com/Ultimate-Conspectus-Matn-al-Ghayat-al-Taqrib/dp/0985884029/ref=sr_1_fkmr1_1?ie=UTF8&qid=1544802738&sr=8-1-fkmr1&keywords=matn+abi+shuja), The basis for all Islamic finance and halal transactions is that risk must be SHARED; however, given most of the banking system and modern economy of today, risk is often lopsided and on the consumer/average citizen. Another common misconception is that the modern day commercial banking system is different from the ‘Riba’ in the pre-Islamic era. There is no … But really good stuff, very hard to find in depth, practical and honest analysis of an area that causes concern. Thank you Br for the nice arguments. This is a long debate, we must have seen that some of the scholars are calling it Halal while others are calling Haram, to counter … https://www.youtube.com/watch?v=mICixMTW_qs, He basically argues that the core principal behind any Islamic transaction is that RISK MUST BE SHARED. Designed by 6:40. I don’t like that – and that, I think, is ultimately why interest is haram.” There are two problems with renting out the “confidence of many others in society”. All discussion I have seen have been around debt, interest, etc. There are also some misconceptions Muslims generally have about Riba. Bribery is also not allowed. seek Allah’s forgiveness and pray that HE may provide us with halal income and investment opportunities. Go. 6 years ago | 127 views. Sep 10, 2018 - Allah warns us to leave interest alone alone. So we’re renting out “confidence of many others in society”. If they really do believe this lie, it is as God has said (Surat al-Baqarah, 2:274): they have been so disoriented by the touch of Satan that evil appears to them as good, and goodness appears to them as foolishness: ‘Those who live on usury shall be raised before God like men whom Satan has maddened by his touch.’”. Ibrahim holds a BA in Philosophy, Politics, and Economics from the University of Oxford, an Alimiyyah degree from the Al Salam Institute, and an MA in Islamic Finance. Haram Becomes Beautiful - Powerful Reminder. Lv 7. Please give AUTHENTIC HADTHS AND AL HOLY QAURANIC VERSES PLZ! I hadn’t read that before. I mean business is business. 6:08. is considered haraam in Islam, is because the All-Knowing, All-Wise, Lord Who Created has condemned it as haraam, and absolutely forbidden it for the believers who sincerely believe in Him and the Last Day. The only logical thing I can deduce would be that the banks make money through late fees, and interest in lending mortgages and loans and that money then comes back to the earned money by banks which pay your interest earned from your saving as it increases for the banks. Assalamualaykum WaRahmatullahi Wabaraktuh. P.S. *Salam Alaykum' Even if you want to go for savings accounts – the Islamic banks have that too. In fact, in Islam, it is allowed to borrow money from someone to invest for profit and then repay this interest-free loan to … If he takes out an interest-bearing loan, the net transfer will be from the poor to the rich, which is counter-intuitive and exploitative on all but a really hardline analysis. Even among Muslims there are people who do this though they well know that God has condemned lending in this manner: it is against the law of God to charge rent for the use of money, as if it were just a simple commodity like land or buildings or tools or other property of the kind that can be lawfully rented out. The purpose of loan is also immaterial whether it is consumption or productive, it will be haram. Well, what is this value that we are storing? Like us on FB: https://www.facebook.com/pages/Ink-Of...Official Ink Of Knowledge' Facebook Page. If the riba (interest) element is removed, a convincing case can be made that online Forex trading is halal and not haram, especially if leverage is not used. like some people cant afford stuff and they need it and what if you kno you can pay the loan off? The severity of Riba can be well understood by the above words of Quran and Hadith. Just as fasting or giving alms is fard because of “divine order”, so too is interest forbidden for the same reason. Sep 10, 2018 - Allah warns us to leave interest alone alone. I have mainly been relying on Zoya app to make decisions. You committed a haram action by giving him the interest. If you agree that there will be a $5 on top of a $50 dollar loan, then that's not haram. The main reason that Muslims consider interest prohibited is because the Qur'an which instructs them in many places to stay away from interest. The approach is a simple, logical argument which doesn’t require detailed knowledge of the Qur’an and hadith on the topic. Interestingly enough, in the commentary in the original version of the Abdullah Yusuf Ali English translation of the Qur'an, he said that he interpreted "Riba" to mean usury and not interest. He is the co-founder of Islamicfinanceguru. Follow. However my view is that you can avoid inflation by investing in halal options instead. Privacy Policy  /  Terms of Use. But still these are considered haram in today’s time based on the principles of their prohibition. “A clear, common example of this [people claiming to provide a valuable service to the community while in fact exploiting people in need] is the practice of loan-sharks who lend desperate people money at cruelly high rates of interest and claim to be providing a valuable social service. Answer for question: Your name: Answers. It is narrated by Ibn Isa, and recorded in Abu-Dawood Hadith #3325, “There will come a time when you will not be able to find a single person in the world who will not be consuming riba. But what about the case of a doctor who earns £100,000 a year, who wants to take out a mortgage and pay £1000 a month for 25 years, and own his house at the end of it, rather than £1000 a month in rent for 25 years and own nothing at the end of it? 6 years ago | 127 views. Share this article via facebook Share this article via twitter. To be more specific, haram means any sinful act that Allah mentions in the Quran and prohibits us from doing. I think the concept of having the amount of profit you make fluctuate over time is haram not the idea of making money. I am fairly new at stocks, trying my best to inform myself on what stocks are halal or haram. So I don’t feel this is an argument without a comeback. All discussion I have seen have been around debt, interest, etc. We like money because it buys us nice things, not because that piece of paper is really useful itself. The money is lent as debt (claims on your assets and labour) at interest (which is not created along with the principal). May be the subject matter of Riba was a mature one which could not be well understood by the young minds, but so are alcohol, gambling and even fornication. It’s not that Islam forbids us making money, it’s that Allah has forbidden making money from things which are intrinsically useless. By signing up, you'll get thousands of step-by-step solutions to your homework questions. The bad news is there are some (nearly as) sensible, clear answers to the answers. ! In Islam, the validity of a financial or commercial transaction is not dependent on the financial status of the transacting parties. And violated your soul. Interest just gives you money! Renting out such an item would then be allowed, as the thing being rented out is the usage of the creation that took a great deal of technical skill and know-how to create, not just the raw gold material. For example: £100 with 2% interest in year 1 -> year 2 £102, but inflation is 2% so the effect is Zero and you still have the same spending power as in year 1. Let’s discuss some of those misconceptions: Some people argue that the word ‘Riba‘ in Quran refers only to the usurious loans which would entail exploitation as excessive rate of interest is charged, and this is not the case with modern banking as interest on consumer and commercial loans are not exploitative or excessive. He was previously a private equity/venture funds lawyer in the City. Many people believe "Riba" means any form of interest, but some believe it only refers to usury. Paying over 100% interest (like loan sharks) is not allowed but low interest rates may be allowed because they stimulate economic growth, as is practiced in the modern economies. The question is, whether all kinds of interest is haram, or only a specific kind of interest (usury) is haram. Why is Riba/interest haram in Islam? Alcohol, gambling, bribery are haram for both rich and poor. The root cause of inflation is interest, get your facts right, this is why it’s Haram to do investment with interest. Raise your concerns with your government / banks/ employers and all stake holders and pressurize them to provide halal alternatives for banking and investment, especially in Muslim countries. Answer Save. One could argue that interest is simply a compensation for usage of money during the term of the loan. As Muslims we all have heard that Riba (interest) is haram in lslam. Honest question, doesn't mean i will disobey Allah's (swt) laws, but just out of curiousity. The bank first acquires the property or goods, and the customer leases it until he or she can pay back the full amount over a period of time. Haram is an Arabic word meaning “Forbidden.” Haram is the things that the Quran and the Sunnah forbid. Share this article via facebook Share this article via twitter. I lend you £100 for 2 months; I consequently don’t have access to my £100 for 2 months and should be compensated for that loss of opportunity. In addition, due to lack of complete understanding many a times we have our own reasons and justifications to not believe and understand the severity of the issue. This field is for validation purposes and should be left unchanged. But as ever, I’d love to hear your thoughts on the above, any alternative arguments you have found useful, and what you guess I will be arguing in my next article! If the riba (interest) element is removed, a convincing case can be made that online Forex trading is halal and not haram, especially if leverage is not used. like some people cant afford stuff and they need it and what if you kno you can pay the loan off? The question is, whether all kinds of interest is haram, or only a specific kind of interest (usury) is haram. The proponents of interest may however, argue that the present commercial lending on interest is meant to be a mutually beneficial arrangement. All rights reserved. A young prosperous sophisticated entrepreneur can take on a lot of risk. Post Preview. Salam I know I should be asking this question to an Imam but wanted your thoughts Why is interest haram? Why is interest haram? I guess the primary reasons for the same is lack of proper understanding of the severity of the issue among Muslims. I have also written a 13 part article series on the subject which were published in Islamic Finance News. Music. I sometimes google and find detailed explanations on why a certain stock is halal or haram. Riba is haram. Many Forex / CFD brokers offer Islamic trading accounts which do not charge or pay overnight interest on open positions. Findings – The results of the paper suggest that interest has a great negative impact on the society, economy and morality of human beings. Mortgage is haram as it charges interest, although as you have sene above the way it is perceived can influence peoples views on if it is Haram or Halal. And Allah knows best. I mean business is business. It may also include some other transactions, wherein the return on principal is fixed as an amount or percentage. The main reason that Muslims consider interest prohibited is because the Qur'an which instructs them in many places to stay away from interest. There is no such evidence in the Qur’an and any other evidences need to be understood based on the directive of the Qur’an. Relevance? The reason why interest is forbidden by divine order is obvious: It is forbidden because Allah forbade it. For example, there are small sins that are considered forbidden in Islam like rude behaviour or the use of foul language and there are MAJOR SINS like stealing or the consumption of usury/interest (riba). I think the concept of having the amount of profit you make fluctuate over time is haram not the idea of making money. My halal student debt: How Muslims navigate Sharia financing when interest is haram. Aili Amiya. That has already been discussed in question no. 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