such purchases, probably he will take years to gather and until such time the prices of such items will be multiplied for him to save more money.
This process will go on as such in most of the cases people will be deprived from the very urgent needs to fulfill in the whole of life. In the process the Muslims will not be able to improve their lot and left behind from other Non-Muslims.
For commercial activities such as setting up of production units and offices, a lot of money is required to be spent at a time and no individual or even a group of people will be able to arrange such a big sum of money. As such, the only option left is to go in for loan from banks etc. failing, which the Muslims will not be able to take such commercial activities and again will be forced to be left behind. Borrowing money and thus paying interest for business loans is an inevitable for business and other organizations.
Let us take up the case of education especially higher one, where again a lot of money is required and nobody in the community or otherwise, will be helping a Muslim fellow who want to go in for higher education. Under the circumstances, such person will have to take loan otherwise; he will not continue his studies. Therefore, the community will again face a problem in this competitive society and will be further backward in the country.
Similar will be case for opening shops or procuring the raw materials for further processing for value addition to meet the targets or requirement of markets. No loan will again be a big hurdle.
In most of the cases, the establishments may be govt. or private, salary of the employees and their employee provident fund etc. are deposited in the banks, exposing the employees to taking interest on the balance left. This happened in most of the cases and if interest again taken as riba the poor fellows is bond to commit sin or otherwise stand to loose the value of his savings due to inflation about 10% per year much more than the interest paid by most of the banks.
Let us take the case of farmers who are required to purchase fertilizer, seeds, pesticides tractor and other agro-appliances in most of the case when they do not have their own money. If they do not go in for such purchases they will be deprived from harvesting rich crops and as in the cases above will be inviting poverty, hunger and in some cases God forgives, even suicide. As such, the farmers are left with no alternative but to take loan from bank and pay interest.
There are numerous such instances where one cannot avoid interest totally without letting himself in problems such as loss of production, loosing the market for not adhering to the commitment, complete deprivation of facilities their next-door neighbor is enjoying.
For further elaboration, a house was built on a plot about 25 years back and the total cost came out was Rs. 5 lakh part of which was met from a loan advanced by the company on interest rate lesser than what was prevailing in the market at that time as employee’s benefit included in his emolument package. It was affordable though salary was modest at that time. Now the cost of the same house is more than ten million and has gone out of the reach of the person.
Another example worth quoting here is the employee’s provident fund. If a Muslim doesn’t accept the interest accrued on his accumulated amount and take only what is his principle amount he will be looser in comparison of the non-Muslim whose accumulated amount with interest accrued will be many times of that the poor Muslim. More over interest on the fund is a part of package of emolument his employer has agreed on his own as a rule.
There is an example from an individual where it is said that he has paid enough rent in the past 20 years to buy several houses by now as he is in utter confusion and took a safe path of avoiding interest on the fund he would have to take to purchase a house.
As regard to the paper money we are dealing with, it is loosing its value at a rate higher inflation year to year. For instance, if a Muslim has a amount of Repees one thousand as his provident fund the value will be reduce to the extent that he will be left with worth 100 rupees if he go in for purchase of commodity now than he would have purchased the same ten years back. From where he will be compensated for the loss if he is denied the small interest.
In a very simple thinking, the financial institutes like banks are managing flow of the money in the market for their clients by getting money deposits or dispersing the same as loans to the needy. For such services, they are bond to charge some amount for the bank to at least pay for the cost of the loan to the lender if any, and compensate for any change in the value of the currency over the time of the loan and function well. More over, they are supposed to share the profits they get from the loan advanced in the form of interest.
A dilemma the Muslims are living in is one of the reasons why they are slipping out of the race of progress in the country. They are in an utter confusion and not finding respite from any corner. It is not known to what time this state of affair will continue unresolved. So there is an urgent necessity of finding out some solution, so that the Muslims are not put at a disadvantage viza-viz his contemporary other fellows at the same time they remain at easy as regards to their belief in the religion.
A few instances, which can be shared over here and may be taken into account while finding a way out from the confusion, are:
Many people are unwilling to lend because they know that they will not get the same value of money back because they will not accept the interest due to it being declared haram and at the same many borrowers are suffering because they don’t get many lenders around who are working Islamic ways.
Usury is condemned and prohibited in the strongest possible terms. There can be no question about the prohibition. When we come to the definition of Usury, there is room for difference of opinion. Hadhrat Umar, according to Ibn Kathir, felt some difficulty in the matter, as the Apostle left this world before the details of the question were settled. This was one of the three questions on which he wished he had had more light from the Apostle, the other two being Khilafat and Kalalat. ...
The opinion of the mufti of Egypt, Shaykh Muhammad Sayiid Tantawi, who in 1989 declared that interest on certain interest-based government investments was not forbidden Riba (because the gain is little different from the sharing of the government's profits from use of the funds or because the bank deposit contract is novel), thus joining the thin ranks of prominent religious figures who have issued fatwas declaring clear interest practices permissible. Later he went even further, saying that interest-bearing bank deposits are Islamic, and more so than 'Islamic' accounts that impose disadvantageous terms on the customer. Laws should change the legal terminology used for bank interest and bank accounts to clarify their freedom from the stigma of riba."
[Vogel and Hayes, p. 46] Commentators describe a pre-Islamic practice of extending delay to debtors in return for an increase in the principal (riba al-jahiliyya). Since this practice is recorded as existing at the time of the revelation, it is one clearest instance of what the Qur'an prohibits.
The Quran forbids usury, not interest Usury is defined as excessive interest A Dictionary defines usury as "an excessive or inordinate premium for the use of money borrowed", “extortionate interest", or "the practice of taking exorbitant or excessive interest". The Arabic language also makes distinction between interest (Fa'eda) and usury (Reba). The Quran forbids Reba or Usury. Earning interest and paying interest is perfectly acceptable, as the Quran has not prohibited interest.
While returning loan to a fellow Muslim, Prophet Mohammed (pbuh) gave additionan amount, which the person did not demand but accepted.
During the last days’ our beloved Prophet (pbuh) when riba was declared haraam, there were moneylenders who used to lend the money and used to extract addition money at an exorbitant rate and delay in payment of the loan used to invite further intolerable penalty. Thus, it was a curse for the needy. To curve the menace taking riba i.e. forceful extraction of money in addition to the principle amount was prohibited.
After interest became completely legalized, the word usury began to mean, “Lending at excessive or illegal rates.” For example, Abdullah Yusuf Ali [1872-1953] equated, not interest but, usury with riba and wrote in his highly acclaimed translation and commentary of the Qur'an
Imam al-Ghazali argued against those who said that it was not right to use Haram money in charity.
The 'Riba' dispute really needs to be examined against a backdrop of internally acceptable practice. One point of view is extremely rigid and totally prohibits any rate of interest whatsoever. This means that even in cases in which the rate of inflation in the country is, say, 10 per cent, there is a prohibition against even recovering this amount from a borrower. In other words, if a man borrows Rs.100,000 on January 1 and on December 31 the true value of the amount is Rs.90,000, it holds that the lender can only recover Rs.90,000 (in real terms) and must suffer an effective loss of Rs.10,000.
Now, let us take the lenders of today's world as opposed to those of the 7th century when usury was the norm. Traditionally, the borrowers by definition were those in need, often dire need, whose weak bargaining position meant that they were in danger of being exploited by the limited number of people who controlled wealth and capital, and who drove hard, unfair, inequitable bargains by virtue of their superior bargaining position. In time, laws were passed to prevent money lenders from charging usurious rates of interest.
At the time when Islam was born, it was not uncommon for rates of interest of 100 per cent or more to be charged, and it was this excess that was strictly prohibited.
The Quran forbids usury, not interest. Quite a few states in USA have laws against usury. Usury is defined as excessive interest. A Dictionary defines usury as "an excessive or inordinate premium for the use of money borrowed", "extortionate interest", or "the practice of taking exorbitant or excessive interest." The Arabic language also makes distinction between interest (Fa'eda) and usury (Reba). The Quran forbids Reba or usury.
reports, analogical reasoning and consensus
It has been earnest endeavor of our brethren in the Ummah and pray so to the Almighty Allah for the Ummah as the whole to meet Allah and enter Paradise. Every Prophet beginning from Hzt Adam to our last beloved Prophet Mohemmad (pbuh) had an strong feeling for their followers to have a comfortable life both here in this world and hereafter. So are we all praying to Allah for our complete salvation and a happy prosperous life here in this world. Here it is for the Ulmahs to come forward to work out formulae/formula first to ensure that Muslims remain committed to the true path shown by their religion and further they are not deprived from opportunities to progress in life.
Usury/riba which was used to be charged by lender from the borrower for delay in payment, was declared haraam on the taker and not the hapless giver who could not pay the debt in time due his poor financial condition or other constraint. The revelation is for zulm done by the lender against the poor borrower because the lender used his financial power for exploitation of poor guy for further enhancement of his money power. The matter was written only to put up the problem in its proper prospective depicting what is actually happening in the Muslim society and always a source of worry as regard to the life hereafter and progress here in this world.
N.B:
The interest charged by a good reputed modern-day bank, does not fit into the Qur’aanic definition of Ar-Riba. A substantially major portion of such interest is for compensating the bank for actual expenses incurred by it. The rest, which is substantially a minor portion of the interest, constitutes the net profit of the bank.
Sheik Tantawi. Other progressive fatwas he issued include: the enforcement of Islamic law in a secular country is not necessary, for example bank interest is halal (allowed).
Ahmad recorded that Sa`id bin Al-Musayyib said that `Umar said, "The Ayah about Riba was one of the last Ayat to be revealed, and the Messenger of Allah died before he explained it to us. So leave that which makes you doubt for that which does not make you doubt.''
Today the prohibition is hardly observed in any Islamic country. Either it is simply disregarded -- the Egyptian Mufti Muhammad 'Abduh once declared "moderate interest" lawful -- or it is referred to by some such euphemism as "commission".
The Quran forbids usury, not interest. Quite a few states in USA have laws against usury. Usury is defined as excessive interest. A Dictionary defines usury as "an excessive or inordinate premium for the use of money borrowed", "extortionate interest", or "the practice of taking exorbitant or excessive interest." The Arabic language also makes distinction between interest (Fa'eda) and usury (Reba). The Quran forbids Reba or usury. Earning interest and paying interest is perfectly acceptable, as the Quran has not prohibited interest.
Abdullah Yusuf Ali [1872-1953] equated, not interest but, usury with riba and wrote in his highly acclaimed translation and commentary of the Qur'an."usury is condemned and prohibited in the strongest possible terms. There can be no question about the prohibition. When we come to the definition of Usury, there is room for difference of opinion.
The Quran forbids usury, not interest Usury is defined as excessive interest A Dictionary defines usury as "an excessive or inordinate premium for the use of money borrowed", "extortionate interest", or "the practice of taking exorbitant or excessive interest." The Arabic language also makes distinction between interest (Fa'eda) and usury (Reba). The Quran forbids Reba or usury. Earning interest and paying interest is perfectly acceptable, as the Quran has not prohibited interest. Interest is an essential component of the financial aspect of an individual or an organization.
Malik related to me that Zayd ibn Aslam said, "Riba in the Jahiliyyah was that a man would have a debt (haqq) on a man for a set term. When the term was due, he would say, 'Will you pay it off or increase me (`ataqdi aw turbi)?' If the man paid, he took it. If not, he increased him in his debt (zada hu fi haqq hi) and lengthened the term for him." (Muwatta 1180)
In iii.7 we are told distinctly about the Quran, that some of its verses are clear (and of established meaning), and others are not entirely clear, and it is mischievous to treat the verses that are not entirely clear and to follow them (literally)....”
can we make distinction between exorbitant rate of interest and reasonable rate of interest with the special mention of modern. Prophet condemned was the practice and not the very concept of loan, because condemning only the practice of charging interest and retaining the concept of giving and obtaining loan is not sustainable.
Ayats 2.275 and 2.276 do condemn usury (Riba) and the faithful is asked to give up his demand of what can be construed as interest or Riba. However, clearly, it is only the inhuman demand of fleecing a poor man only to increase his burden of poverty.
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