Riba & Its Types

Riba The word Riba means excess, increase or addition, which correctly interpreted according to sharia law terminology, implies any excess compensation without due consideration (consideration does non include time value of bullion). Types of Riba 1. Riba AnNisiah This is the stipulated evoke which the lender takes from the borrower in consideration of the time given to the borrower to pay back the capital. It is HARAM based on the script and the Sunnah and the consensus of Muslim scholars. . Riba Al Fadl This applies to barter (exchanging hotshot commodity for another), where commodities of the same type are transfer in unequal fares, especially the exchange of precious metals and pabulumstuffs, it is HARAM, by the Sunnah and the concensus of scholars as it paves the way for Riba nNasiah. many ahadith have demonstrated the prohibition with regard to cash, silver, wheat, barley, dates, and salt.The Prophet sallaAllahu alayhi wa sellem said, Gold for gold, and silver for si lver, and wheat for wheat, and barley for barley, and dates for dates, and salt for salt, like for like, equal for equal, from hand to hand (the transaction must be completed in the beginning the two sides leave each other). But if the types are different then sell as you wish, as long as it is hand to hand. (Muslim) The Prophet sallaAllahu alayhi wa sellem also said, Whoever gives more or asks for more (than what he gave) commits an act of Riba, the given and the taken are kindred (in the sin). (Muslim) The Prophet sallaAllahu alayhi wa sellem said, Prohibited selling food (of the same variety) except equivalent in weight and hand to hand. (Muslim) Do not sell gold for gold unless equivalent in weight (and from hand to hand), and do not sell less mensuration for greater amount or vice versa, and do not sell silver for silver unless equivalent in weight (and from hand to hand), and do not sell less amount for greater amount or vice versa and do not sell gold or silver that is no t hold at the moment of exchange for gold or silver that is present. (agreed upon)To lend a bank money or borrow from it on the condition of a payment of a fixed annual or monthly percentage rate of interest, say 2%, or more or less, is a wee-wee of PROHIBITED RIBA. whereas Allah has permitted trading and forbidden Riba (usury) 2275 Poverty isnt an excuse for Riba. Mudaraba which is a form of partnership where one person invests money and the other invests his skill and effort, and they share the profit or loss of the enterprise, so Islam did not impose any hardship on the people (by prohibiting Riba) but rather it provided them with a viable alternate to it, among them are the following . Qard Hasan (a beautiful loan) Istead of a Muslim loaning his money on interest which causes contamination and blight on all his property and oppresses the borrower, Islam encourages him to make the loan Qard Hasan, and promised him a gracious reward for it Allah said, Who is he that will le nd to Allah a goodly loan so that Her may multiply it to him many measure? 2245 2. Giving an extension to a person who cannot repay the loan on time because of monetary difficulty, until he gets back on his feet.And Islam encourages the lender to forgive the loan altogether in this circumstance Allah said, And if the debitor is in a hard time (has no money), then grant him time till it is swooning for him to repay, but if you remit it by way of charity, that is better for you if you did but know. 2280 3. Mutual Aid by all means This encompasses uncouth aid on a social level, in industry and in agriculture, and social security by financing farmers and industrialists and craftsmen in order to enable them to produce effectively.This returns a usefulness to the whole Ummah. Also, opening schools and buidling hospitals and homes for the elderly and the incapacitated and all other items alike fall under the mutual aid mentioned in the verse help you one another in Al Birr and atT aqwa (virtue, duty and piety) 52 The society which realizes these means will proceed, in the shade of this comprehensive mutual aid, jubilantly and far removed from the distress of Riba. . We should not forget the payment of Zakat to those who deserve it. This will have a major impact on getting rid of Riba. BEWARE from putting your money in a *nonIslamic bank*. Even if you dont take interest on it, the bank takes your money and loans it out to gain interest. So you are helping the Riba system, and are indirectly responsible and beware from taking loans from those banks.