03-24-2004, 09:22 AM
<BLOCKQUOTE id=quote><font size=1 face="Verdana, Tahoma, Arial" id=quote>quote<hr height=1 noshade id=quote>
dear sumaaan, i m little bit confused about the difference b/w Riba and Interest,
take a look at your example of investment in the business started by the the friend, if somebody invests in a business, the return on that investment is dependent upon the profit earned by that business, in case of loss you will not earn any thing, even there is a risk of loss of your original investment.
u cannot compare the above investment with the amount invested in a bank, where there is no risk of loss of your original investment moreover the return is predecided and guaranteed even if the bank suffers loss in the business.
SMR
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>
Theoritically and rationally speaking, if we take that 'business with a friend example', if one invests a very small amount which forces him not to take part in business decisions, then he shouldn't bear any losses and infact should get his 'fixed' return, because the reason why the business flopped was NOT his fault as he was never involved in decision making...
Thats the reason why banks offer a fixed percentage return because the investor is never really involved in any decision making with the bank as to where the bank should further invest the money, etc.
dear sumaaan, i m little bit confused about the difference b/w Riba and Interest,
take a look at your example of investment in the business started by the the friend, if somebody invests in a business, the return on that investment is dependent upon the profit earned by that business, in case of loss you will not earn any thing, even there is a risk of loss of your original investment.
u cannot compare the above investment with the amount invested in a bank, where there is no risk of loss of your original investment moreover the return is predecided and guaranteed even if the bank suffers loss in the business.
SMR
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>
Theoritically and rationally speaking, if we take that 'business with a friend example', if one invests a very small amount which forces him not to take part in business decisions, then he shouldn't bear any losses and infact should get his 'fixed' return, because the reason why the business flopped was NOT his fault as he was never involved in decision making...
Thats the reason why banks offer a fixed percentage return because the investor is never really involved in any decision making with the bank as to where the bank should further invest the money, etc.