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mintblue
Unregistered Trainee
Kuwait
3 Posts |
 Posted - Jan 12 2004 : 6:17:53 PM
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hey all..
I dont seem to understand the fact that we are not supposed to charge interest in islam.why is it haram?the Quran says that "neither the lender nor the borrower is supposed to suffer in any way"the fact that inflation reduces the power of money and it is why we charge interest,so that the lender gets his value of money back not just the exact amount which he lent..so if we sort of like charge the same %of interest as inflation during that time then neither will suffer right?..nobody should be charged an unfair rate..that is why it was prohibited in the first place...cuz ppl were taken advantage of in their times of crises by ridiculously high interest rates attached to the loan..but something should be there to ensure that the lender doesnt suffer and he must get his real value of money back...
A lot of ppl are unwilling to lend...because they know that they wont get the same value of money back because they wont accept the interest due to it being declared haram...and a lot of borrowers are suffering because they dont get many lenders around who are working the islamic ways...they end up borrowing off banks n places where they havto pay the interest and that makes them immoral because its haram to pay the interest just like it is to recieve interest.(besides making the loan much more expensive than it should be)
i want to know why the maulwis dont look into this more seriously..and work out some way to solve this problem..there must be some solution to this...
Economists tried to work out an object that could be introduced into markets...this object would have a constant monetary value..this object's buying power does not change..for example we could have a coin...this coin costs $10 in yr2000 and $12 in yr2001, mr X lends one coin to mr Y in the yr2000...and he is paid back the coin in the year 2001...so basically instead of being paid back the $10,hes paid back $12...without it being classified as interest(and therefore halal).so mr X gets his real value of money back...and not less.and this coin's buying power does not change.it stays the same...the same things could be bought with this coin in 2000 as in 2001..so maybe the maulwis should pay more attention to these economist solutions and try work something out....it would help the islamic society pretty much i think..id also like to know how the islamic banking system works.
im very new to this and hav only done alevels,ive juss entered acca...so maybe im wrong in a lot of places...my concepts arent that clear yet...but this interest thing bugs me quite often...so id like to know wat others hav to say abt it..and whether there are some things happening to help the islamists which i dont know abt. |
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KJK
Unregistered Trainee
Pakistan
29 Posts |
Posted - Feb 06 2004 : 11:09:46 PM
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quote:
hey all..
I dont seem to understand the fact that we are not supposed to charge interest in islam.why is it haram?the Quran says that "neither the lender nor the borrower is supposed to suffer in any way"the fact that inflation reduces the power of money and it is why we charge interest,so that the lender gets his value of money back not just the exact amount which he lent..so if we sort of like charge the same %of interest as inflation during that time then neither will suffer right?..nobody should be charged an unfair rate..that is why it was prohibited in the first place...cuz ppl were taken advantage of in their times of crises by ridiculously high interest rates attached to the loan..but something should be there to ensure that the lender doesnt suffer and he must get his real value of money back...
A lot of ppl are unwilling to lend...because they know that they wont get the same value of money back because they wont accept the interest due to it being declared haram...and a lot of borrowers are suffering because they dont get many lenders around who are working the islamic ways...they end up borrowing off banks n places where they havto pay the interest and that makes them immoral because its haram to pay the interest just like it is to recieve interest.(besides making the loan much more expensive than it should be)
i want to know why the maulwis dont look into this more seriously..and work out some way to solve this problem..there must be some solution to this...
Economists tried to work out an object that could be introduced into markets...this object would have a constant monetary value..this object's buying power does not change..for example we could have a coin...this coin costs $10 in yr2000 and $12 in yr2001, mr X lends one coin to mr Y in the yr2000...and he is paid back the coin in the year 2001...so basically instead of being paid back the $10,hes paid back $12...without it being classified as interest(and therefore halal).so mr X gets his real value of money back...and not less.and this coin's buying power does not change.it stays the same...the same things could be bought with this coin in 2000 as in 2001..so maybe the maulwis should pay more attention to these economist solutions and try work something out....it would help the islamic society pretty much i think..id also like to know how the islamic banking system works.
im very new to this and hav only done alevels,ive juss entered acca...so maybe im wrong in a lot of places...my concepts arent that clear yet...but this interest thing bugs me quite often...so id like to know wat others hav to say abt it..and whether there are some things happening to help the islamists which i dont know abt.
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KJK
Unregistered Trainee
Pakistan
29 Posts |
Posted - Feb 06 2004 : 11:20:23 PM
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Assalam O Alaikum
My dear
First of all I would like to congratulate you on joining ACCA.I am also a student of ACCA.
I totally agree with you on the matter you have discussed/asked.My Concept is that the person who lends money has the fundamental right to enjoy the same facilities of money lended by him to the borrower after the decided period of time.
In Islam I think that both the parties are considered not to bear any additional burdon of money by both the lender and the borrower.
This was my view , but if you have any other information then please let me inform about that because for sometime I myself remained quite puplexed on this issue.
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webmoxter
Junior
Pakistan
73 Posts |
Posted - Feb 08 2004 : 08:56:52 AM
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The views of both of you is not correct as far as Islam is concern as the basic of Islam is that Interest is not right then how can you people can do the interest a right way whether you tell it interest profit or what else
A pig cannot be changed by placing on him the name of goat the same is the way for interest
You people can refer the books of Maulana Taqi Usmani in this behalf then the concept of yours will inshallah be corrected.
Best Regards
Webmaster
www.practiseislam.com |
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webmoxter
Junior
Pakistan
73 Posts |
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Sohaib_Ah
Unregistered Trainee
Pakistan
6 Posts |
Posted - Feb 09 2004 : 7:18:06 PM
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Assalamuallaikum!!!!
it was very depressing to see the comments of the above two people
INTEREST is haram
it is an open war with Holy Prophet(pbuh) and ALLAH ta Ala
what ever yuo say there is no justification for this....
see........
when you told after you become rational i mean at the age of 4 or 5
that your parents are your real parents i mean they make you call themselves parent you dont argue when you get older that why are you our parents why not some one else.....
similarly when Quran and hadith which is the final authority tells you in a clear cut manner that Interest is HAram there can be no arguments or favours......
similarly people will now say that Wine is halal too because in olden days wine had a heavy addiction but now adays it is made in a way that there is no adiction......
as the facts go on.........
Mat ALLAH ta Ala give us courage to fight the evils
"""A time will come before Qayamat that no person. will be saved from the haram interest sood bribery in directly or directly""
Please pay a little heed here
Longing for the prayers
Sohaib Ahmed
CA is nothing but ......
life less iffs and buts...... |
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webmoxter
Junior
Pakistan
73 Posts |
Posted - Feb 14 2004 : 8:54:38 PM
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Thank you Shoaib for giving such a good clarification
Webmaster
www.practiseislam.com |
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jbladeus
Manager
Pakistan
693 Posts |
Posted - Feb 15 2004 : 01:33:36 AM
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Sohaib and Webmoxtor
If some members have views other than yours, then convince them by the power of rational argument instead of ridiculing them personally. This is highly degrading and unprofessional behavior. If you want to make a point, then do so by giving logical arguments in a cool and calm manner. And if you don't have the appropriate knowledge on this issue, then please do not force your views on anybody in this fashion.
As you can see, the first two posters are young and are students. Dont kill off their curiosity and thirst for learning by this sort of a behavior.
Islam is a rational religion and is always backed up by sound logic. You ppl make it sound like that there is no room for any discussion and one should be practice islam blindly without understanding the actual mechanics.
Since i do not count myself as one who has sufficient knowledge on the subject, so i would not comment on it. There has been a lot of work done on this throughout the islamic world and the internet is full of articles and material on it. I would recommend mintblue and KJK to do a little bit more research on this and i am sure that they will come to understand why interest is said to be haram in islam.
________________________
Arrrgh... it sure's gonna be mighty rough sailin' today ... mates! |
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mintblue
Unregistered Trainee
Kuwait
3 Posts |
Posted - Feb 21 2004 : 11:19:13 PM
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salamz
i never intended to claim that interest is halal and i am not in a battle against God!!im not saying its not haram i was just curious abt the effects of inflation..i dont think inflation existed when the Quran was sent.
anyhow as we r not supposed to question too much i wont put myself in a risky situation and probe into it any further.and ive read a little bit abt this and i come to the conclusion that one is not supposed to take advantage of ppl's crises.therefore ure supposed to help them without any self incentive..even if it puts u in loss..because ure supposed to help ure muslim brothers.
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k.kamran
Unregistered Trainee
Pakistan
14 Posts |
Posted - Mar 02 2004 : 1:45:12 PM
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certainly interesrt ( riba ) is haram in islam and islam always prohibits things which are in the interest of peoples to protect them selves from evil. Interest give rise to social injustice where poor becomes poorer and rich being influential give loans to poor and then charge a lot on it as return.
Simply one must not get into complexities. simply if islam has declared interest has haram it is haram and no if and but to find alternatives under the shelter of islamic names such as markup etc.
kashif |
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Khan
Unregistered Trainee
Pakistan
2 Posts |
Posted - Mar 04 2004 : 11:22:15 AM
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AOA
friends
i have just read out the article.well, i am very pleased to know about the forum and about the exchange of veiws.
i have no complete knowledge over the word interest and its harmful aspects but i would like to share my veiws with friends to extent of knowdge.
my friends, the most important thing we have to know what is interest ?. It is not very simple. The advancement in financial knowledge has made the word "interest more complex". But this thing is very pleasing that we have the curiosity to know about our religion. Thanx to the Great Allah who blessed us the great Ulma,s who can better guide us toward the right way. Molvi's are no more restricted to mosque just to offer pray. but there are great scholors who are woking to make the new concept and approaches to make them in line with the priciples of Islam. Molvi Taqi Usmani is on of those blessed person ( may Allah bless him a long life ).in respect ur queries u can contact him he is the person who declared all those biznes should be restrained which are based on interest(order of the shariat court).
My friend is going to make prove interest as good mean by comparing inflation of currency at two different. well, the first thing is wether currency inflation is halal are haram . we can seize the value curreny(fix).so i think this rate of change is not the justification for charging interest.
i would like to tell my friends about my own experiences , recently Gov has changed the interest rate. the purpose was to speed up the movement of the money n the economy. so many of the persons are known to me with draw their deposits and made investment, i just wanna tell you. money on interest can benefit only a few members of the community but money in investment like bizness can benefit a lot of pple. Islam principles focuse on the welfare of the whole community not just on single person. In broad vision money will be concentrated in few hand and poor will become poor and richer will be come richer and this is a huge social evil and a great injustic.
second i have the experience that a person give money to some body on interest. there is no risk that he will suffer a loss.b coz he will be sure that whatever happens to the borrower he will get a fix profit. so this is some thing very disasteriuos for one Tawakal u alallah.on the other way one will feel more and more tawakulul alallah.
well , i am trying to get more to lnformation to let my friends know.
As far as interst
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fidarsi
Unregistered Trainee
Bahrain
15 Posts |
Posted - Mar 12 2004 : 2:17:48 PM
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As salam u alaiykum!!!
Well in my view there is no ambiguity that RIBA /INTEREST is haram. It is haram and nothing made it halal in whatsoever form.
The point where we need to concentrate is either the current Islamic products which are available in financial market are in line with sharia or not.
Plz Smile ...... its cost just some pleasent breaths! |
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smraza
Manager
Pakistan
852 Posts |
Posted - Mar 13 2004 : 10:02:19 AM
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As i dicussed in some other topic that the schemes offered by the islamic and non islamic bankers are almost the same, even if u calculate and compare the IRR of the financing offered by both these bankers you will also find it between the same range.
SMR |
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sumaaan
Moderator
472 Posts |
Posted - Mar 14 2004 : 02:48:54 AM
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quote:
As salam u alaiykum!!!
Well in my view there is no ambiguity that RIBA /INTEREST is haram. It is haram and nothing made it halal in whatsoever form.
The point where we need to concentrate is either the current Islamic products which are available in financial market are in line with sharia or not.
Plz Smile ...... its cost just some pleasent breaths!
Correction... There's a difference between Riba and Interest.
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fidarsi
Unregistered Trainee
Bahrain
15 Posts |
Posted - Mar 17 2004 : 2:16:24 PM
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Kindly identify the difference between riba and interest
Plz Smile ...... it cost just some pleasent breaths! |
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smraza
Manager
Pakistan
852 Posts |
Posted - Mar 18 2004 : 4:12:34 PM
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quote:
Correction... There's a difference between Riba and Interest.
as far i know, Riba and Interest are the same things called in two different languages, Interest is an English word where as the Riba is an Arabic word, which means to give some thing and take back in excess of the original thing.
SMR |
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sumaaan
Moderator
472 Posts |
Posted - Mar 19 2004 : 02:00:13 AM
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quote:
Kindly identify the difference between riba and interest
Plz Smile ...... it cost just some pleasent breaths!
Interest is a word used in broader terms... Interest can be on a loan and investment as well.
Riba is a word used in a very limited context... Its the 'extra amount' gained by the principle from the 'loan' he has granted... It is not used for interest charged on Investments.
This topic is a very lengthy one... But if anyone wants to know more about it, I'll be pleased to explain what I have been told by learned scholars of Islam about Riba, and how our 'Islamic Banking' works.
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fidarsi
Unregistered Trainee
Bahrain
15 Posts |
Posted - Mar 19 2004 : 4:28:54 PM
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Well sumaaan I thought we should discuss Islamic banking in Pakistan. I will appreciate if you provide little of your introduction. I agree with you regarding difference between riba and interest. Up to my knowledge riba is the word used in Arabic language and usury is the synonym word used in ancient English language. Then the word interest comes with a broad meaning like “what is my interest in this”. But what matter is only the real essence of using the terminology. Generally interest is used for riba.
Kindly mention some investments in which you thought interest is halal.
We all are happy to receive information in this regards espacially with reference to islamic banking and products offered currently like murabaha and ijarah.
Regards
Plz Smile ...... it cost just some pleasent breaths! |
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sumaaan
Moderator
472 Posts |
Posted - Mar 20 2004 : 12:17:52 AM
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'Interest' is the profit or extra amount gained by the principle when investing or lending money.
'Riba' on the other hand is the profit or extra money gained by the principle ONLY by lending money.
We see that even banks in Saudi Arabia who claim to work through 'pure islamic banking' too pay out interest... Our Al-Meezan Bank, which introduced Islamic Banking in Pakistan itself pays out interest... Then where does the whole Riba-Free banking concept go?
Well actually you see, when you 'invest' money, you are a sort of a partner in that business... Lets say you have a friend who's starting a 'halal' business, you plan to invest money with him... If you invest a small amount, then you'd be called a 'sleeping partner', i.e a partner who can't take business decisions due to the percentage of his capital employed in the business but gets a fixed return...
Therefore, the same is the case when you invest money in bank... You become a 'sleeping partner' with the bank... And then you get return for your investment...
There is another mode of getting return from your money... By lending a loan one can demand a fixed percentage return or a pre-decided amount to be returned in excess of the principle amount... Now this is the definition of 'Riba'... Riba is earned ONLY from Loans and not investment... Therefore, Islam allows investment...
When our religious scholars claim that the banking in Pakistan is based on 'Riba', they are right... And why is that so?... Its because the profit you earn by Investing money in a Bank comes from the 'Riba' a bank has earned by lending loans... So simply put, the profit you are earning through your investment is 'Haram'...
I hope that simplifies a lot of misunderstandings about the Islamic Banking System.
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smraza
Manager
Pakistan
852 Posts |
Posted - Mar 22 2004 : 11:20:47 AM
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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 |
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sumaaan
Moderator
472 Posts |
Posted - Mar 24 2004 : 04:22:38 AM
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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
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.
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fidarsi
Unregistered Trainee
Bahrain
15 Posts |
Posted - Mar 24 2004 : 4:03:44 PM
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FIXED RETURN …………….. I did’nt agree with this theory, as far as my understanding is concerned Islamic economy is based on risk associated theory. One has to bear risk for return. The difference b/w riba and interest……….its little hard to understand ……... lets simplify ourself (for discussion sake) say riba what is haram …and profit what is halal.
In my view the whole Islamic banking is based on the theory that it’s a pool fund with large base of investors (you can say depositors). The bank acts as a mudarib and invest fund on behalf of depositors. The total return will be ascertained after the period and bank after deducting allocable expenses and mudarib fee determine return for depositors. Now almost all banks in Pakistan especially who are working on Islamic principles not offered fixed rate of return. They quote you last declared rates and the final rate would be different based upon actual performance of the fund. Now the question is ………from where bank get income. Lending??? …… stock market operations??? …… Islamic financing??? …… money market transactions????? …...the bank whose investment side is in sharia compliant product is giving halal profit.
As far as Islamic banking is concerned Mezaan is the first bank who takes license of Islamic banking from State Bank of Pakistan. However, there are number of banks in Pakistan who were following Islamic banking principles even before Meezan. Albaraka Islamic bank is one of them, Faysal bank to the some extent. Now there are many banks that have Islamic banking divisions (separate branches for these operations). Alfalah, Khyber, MCB are among those. They all declare final rates after the finalization of results of the period mostly on half yearly basis. They either pay profit after the period or made payment on provisional rates and adjust after the period. I know Albaraka and they are working on the same principle.
Business on fixed return basis……………… I don’t think this is according to best Islamic practices. Decision making right is not the criteria. One has right on profit from the day he invests in business and should not be fixed; he should entitle the return based on performance of the business. If business makes a loss it should bear it in proportion.
Plz Smile ...... it cost just some pleasent breaths!
Edited by - fidarsi on Mar 24 2004 4:10:40 PM |
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sumaaan
Moderator
472 Posts |
Posted - Mar 24 2004 : 11:08:10 PM
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quote:
FIXED RETURN …………….. I did’nt agree with this theory, as far as my understanding is concerned Islamic economy is based on risk associated theory. One has to bear risk for return. The difference b/w riba and interest……….its little hard to understand ……... lets simplify ourself (for discussion sake) say riba what is haram …and profit what is halal.
In my view the whole Islamic banking is based on the theory that it’s a pool fund with large base of investors (you can say depositors). The bank acts as a mudarib and invest fund on behalf of depositors. The total return will be ascertained after the period and bank after deducting allocable expenses and mudarib fee determine return for depositors. Now almost all banks in Pakistan especially who are working on Islamic principles not offered fixed rate of return. They quote you last declared rates and the final rate would be different based upon actual performance of the fund. Now the question is ………from where bank get income. Lending??? …… stock market operations??? …… Islamic financing??? …… money market transactions????? …...the bank whose investment side is in sharia compliant product is giving halal profit.
As far as Islamic banking is concerned Mezaan is the first bank who takes license of Islamic banking from State Bank of Pakistan. However, there are number of banks in Pakistan who were following Islamic banking principles even before Meezan. Albaraka Islamic bank is one of them, Faysal bank to the some extent. Now there are many banks that have Islamic banking divisions (separate branches for these operations). Alfalah, Khyber, MCB are among those. They all declare final rates after the finalization of results of the period mostly on half yearly basis. They either pay profit after the period or made payment on provisional rates and adjust after the period. I know Albaraka and they are working on the same principle.
Business on fixed return basis……………… I don’t think this is according to best Islamic practices. Decision making right is not the criteria. One has right on profit from the day he invests in business and should not be fixed; he should entitle the return based on performance of the business. If business makes a loss it should bear it in proportion.
Plz Smile ...... it cost just some pleasent breaths!
Edited by - fidarsi on Mar 24 2004 4:10:40 PM
Have to agree with you... You are totally correct... But as far as I have learnt, that 'decision making' thing also comes in the 'halal' boundaries of Islam... Although I will reconfirm with a different scholar this time.
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farazthegreat
Semi Senior
Canada
208 Posts |
Posted - Mar 28 2004 : 8:05:05 PM
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Here's a thought....
If I lend my friend RS. 1 lac and for ten years, I can't charge him anything extra regardless of whatever inflation takes place during that period. But if instead of money I lend him, say, 1 KG Gold (worth 1 lac just for simplicity), after ten years, he will have to return me 1 KG gold. Now if the price of gold has doubled, will the extra lac be considered interest/Riba (whichever is appropriate) and is it Haram. If not, why can't we use something like this to counter inflation.
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Apocalypse
Semi Senior
Pakistan
211 Posts |
Posted - Mar 28 2004 : 9:30:55 PM
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keep thinking and you'll be a Millionaire.
inshallah
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sumaaan
Moderator
472 Posts |
Posted - Apr 05 2004 : 4:33:45 PM
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quote:
Here's a thought....
If I lend my friend RS. 1 lac and for ten years, I can't charge him anything extra regardless of whatever inflation takes place during that period. But if instead of money I lend him, say, 1 KG Gold (worth 1 lac just for simplicity), after ten years, he will have to return me 1 KG gold. Now if the price of gold has doubled, will the extra lac be considered interest/Riba (whichever is appropriate) and is it Haram. If not, why can't we use something like this to counter inflation.
Okay so I discussed this question with a very learned islamic person...
Actually when you invest money, technically speaking, you enter into a contract with the entity/business... Hence, its their duty to pay you the relative profits that your investment has earned you...
But when you give someone 1KG of gold, you don't enter into any sort of contract with that person (considering you're not a raw gold supplier businessman)... In simpler terms, that gold is 'Amanat', and that person has to return it to you someday as it is.
Therefore, the distinction between this example is that of 'Amanat' and 'Investment'.
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smrizvi68
Unregistered Trainee
Pakistan
1 Posts |
Posted - Apr 23 2004 : 4:46:30 PM
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ASA,
Interest(Riba) is totally Haraam in Islam If we argue against it we are going aganist the Quran & Hadis. I really appreciated Mr. Khan description about the matter. but we should know the defination of Interest & should research about the same I thing Mofti Taqi Usmani describe it in detail & we should read his books on that particular topic. May Allah give us strenght to avoid Interest in our life.
regards
Sohail
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derivativetrader
Manager
United Kingdom
605 Posts |
Posted - Apr 23 2004 : 4:50:17 PM
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The current topic seems to be very vibrant!!
OK.., so what about Inflation, the general sustained rise in the price level? Does Islam has any teaching on this?
Would appreciate some feed backs.
Thanks, DT
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bilhash
Unregistered Trainee
Lebanon
3 Posts |
Posted - Apr 24 2004 : 4:05:14 PM
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Salam Folks,
Even though I have strong arguments against the existing theories declaring interest as it is as Riba and thus haram, still I am not indulged in interest based activities taking heed from the hadith which can be summarised as "If you have a doubt about something, leave it..." Excuse me as I am not able to recall it corectly and fully.. Would just like to add some dimensions to the discussion:
Economics is actually the subject here, and not banking and acounting. If you refer any book of Economics, you will find FOUR factors of Production namely LAnd, Labour, Capital and Organisation. In order to produce an economic good, one or more of above factor is needed. Now each factor comes with a price. Land is paid Rent, LAbour is paid wages, Capital is paid interest and Organisation is paid Profit. People who wish to remove capital, a basic factor, are destroying the very foundation of economics. Thus, this utopian so called Islamic economic system wont work in the absence of capital.
Quran declares Riba as haram. In english we have two words (i) Interest (ii) Usury. I believe that its this Usury which is haram and not interest. Usury is that exorbitant rate of interest which defeats the purpose of national economic development and well being of society as a whole and is descriminatory and exploitory in nature. ISlam protects a poor and needy from exploitation. In the times of prophet Muhammad (saw), such interest was enforced. People, for personal needs and obligation (and not business needs), were subjected to such exploitation which is in direct conflict to the virtues of Islam. Thus Quran declared it as a war against Allah and Prophet for those who are indulged in such exploitation. Still, in our feudal society, and even if you visit to Liyari and Fishrey, you will find such interest rates which exceeds 100%. This has made the life of poor peasants and fishermen a real hell, but you wont find any moulana sab coming up for their rescue.
As per well known econmic theories, Prices are the direct effect of supply and demand forces. IF Land is scarce, the price will shoot up. Example is the prices of properties in Tokyo and Newyork. Now match this against the price of Capital. There is abundance of Capital in Newyork and Tokyo and thus the interest rates are as low as ZERO to 2% in those top capitalistic countries. Now who can term this exploitation? In furtherance of my real needs and to increase my standard of living, if I seek capital for such a nominal interst rate, how can Allah declare a war on me? Does this looks logical?
I have more such good reasons which have made me to believe that our moulanas and scholars have a misunderstanding in fully appreciating the philosophy of the modern econmic system. But referring back to my first point, since they are all nearly unanimous, I am not indulging myself in interest.
I would like if anyone can correct me on those.
Wassalam.
Bilal.
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Rafay
Unregistered Trainee
Pakistan
1 Posts |
Posted - Apr 24 2004 : 5:16:46 PM
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Dear Friends
I m thankful to one of my good friend who informed me about this forum.
I am 100% agree with Bilhash that any thing which which creat doubt leave that.
Actaully Islamic banking or trading emphasizes over profit and loss shairing concept.
Interest is only acceptable if there is same psooibilty of loss in that transection.
And this mechanism how how implemnet and how excesise and who implement are other relatively important question to think.
Now a days in pakistan we have just given the islamic name but in fact machenisim is remain same.
Positive thing which we r required is what is mode of Islamic Banking in its real spirit and that on this issue we r in need of "Ijtihad" not by "Qias" from learned islamic scholors paneel
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OMA
Unregistered Trainee
Pakistan
1 Posts |
Posted - May 01 2004 : 6:12:49 PM
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Dear friends
Just a few things to share with you all.
Hope these will help you out in achieving a conclusion on this issue.
1. As a Muslim we should know that when Allah SWT sent us in this world, he gave us certain instructions called "deen" which is a complete way of living.
2. As Muslims we must have faith that whatever Almighty has instructed us to do, is in our favour either individually or collectively.
3. Riba of any sort is Haram and is declared to be a War with Allah Almighty. A number of jurists have discussed a lot on this issue and the issue now stands resolved as far as the perspective of Sharia scholars is concerned, that the modern day interest falls within the definition of Riba.
4. Our Deen also provides us with the instructions on an overall socio-economic system. This system includes various instruction on the modes of contract law, partnership law, taxation laws, sales of goods and other commercial laws. It is not silent on any of the aspect of human life and we are obliged to abide by these instructions individually and collectively.
5. Now coming to the matter of interst, as to why it is Haram and why it is considered to detrimental to the society.
6. The first thing is its social effect that it makes people greedy and loving the money. This effect has numerous social and ethical side-effects also.
7. From economic point of view, this has proved to be detrimental to the collective benefits of the society. If we define interest in purely economic terms, we can say that "it is generation of wealth during a specific period, without any productive activity".
8. Now imagine that irrespective of the performance of other productive factors, the owner of one factor i.e. capital is asking that "you have to give me fixed return, irrespective of whatever gets produced". There is no guarantee that even any productive activity would take place or not. On the contrary he is not taking any risk at all. Does it seem justifiable.
9. Most important thing to note is that since the interest mandates generation of wealth without any productive activity, IT HAS BEEN PROVED TO BE THE PRIME CAUSE FOR "INFLATAION". For this purpose you may consider to study a number of books and papers that have actually diagnosed the capitalist system, fairly in detail and in an analytical manner. How funny is that now people justify its siginficance, because of INFLATION, whereas actually it is the prime cause of inflation.
10. Notwithstanding this selfish, greedy and cruel approach, Islamic financing options are either trade based, rent based or profit and loss sharing based. All these modes are actually based on real factors of production i.e. land, tangible assets and enterprenuer's skills and experience.
11. In all these basis, the financer really takes the risk of loss whereas it is always ensure that some commercial and economic activity is actually underlying these transaction. Accordingly, these are just and equitable bases for business financing.
12. Last but not the least, these all things work ideally in a complete Islamic society, which is currently not present. Islamic banking and finance is just a facet of the same. Nevertheless, we should ensure that we are striving towards development of an Islamic society, individually and collectively. We should further ensure that we are avoiding the interest and all other non-permissible transactions in our individual lives either through avoiding them at all or by using Islamic financial institutions as an alternate.
Thanks and Allah Hafiz
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Azeem Shah Khan
Manager
United Kingdom
706 Posts |
Posted - Jun 13 2004 : 01:33:05 AM
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Dear all
i would like all of u to read a book on "Riba" by Maulana Moudoodi.
i have read this book and have no doubt that interest in any of its form is HARAM. the best thing about this book is that its not written in a traditional way EITHER DO IT OR U R KAAFIR, all the arguments are backed by different rations aspects and logic and with diff dimensions.
unfortunately i dont have enough time to summarise the crucks of that book, and i recommend all of u study and understand it urself.
with regards to the original question that why ineterest is Haram when inflation exists in the economy, my firend as u r a student of accountancy/economics u would know that Interest is ONE of the fundamental causes of INFLATION. i do agree that neither parties (lender and borrower) should suffer, in that case there is a very simple solution that whenever Mr X wants to lend money he should back the value of Loan with some commodity whose value is stable for eg gold, silver, or anything stable in his country's economy, in such a case neither party will suffer.
now u would say money itself is backed up by gold reserves in the central/state bank, the answer to this is NO, no country in this world back up 100% of issued currency by gold reserves, infact it is even less than 10% in most countries. u know Currency itself has no intrinsic value, it is just a piece of paper which cannot depreciate, that is why RENT is HALAL and RIBA is haram.
another dimension to support my argument is that Islam is also a Social Religion and puts great emphasis on helping poor people. if i ask u to lend me 100,000 rupees u will reject me staright way, why? because u dont have 100,000 rupess, similarly, lenders only lend that part of money which is surplus to them, Islam being a social religion encourages rich people to lend their surplus funds on a non-interest basis.
i have got many strong points, but the time doesnot allow me to write.
plz do read the above mentioned book and i m sure all queries re ineterest will be resolved.
Kind Regards
Azeem Shah Khan
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Azeem Shah Khan
Manager
United Kingdom
706 Posts |
Posted - Jun 18 2004 : 11:05:26 PM
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is this group still active
azeem
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s_o_h_a_i_b
Unregistered Trainee
Pakistan
13 Posts |
Posted - Jun 21 2004 : 12:15:28 AM
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Asalamuallaikum
azeem khan ....... your views are worth saluting......
thats should me the appraoch now when people are arguing about the interest people will in future put farward such economical reasons to prove that wine and pork is halal ANOUZUBILLAH
may ALLAh give these people hiddayat
Ammen
Sohaib Ahmed
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s_o_h_a_i_b
Unregistered Trainee
Pakistan
13 Posts |
Posted - Jun 23 2004 : 01:42:33 AM
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one thing more i will like to add
tell me one thing people.....
when your rules and sections in INCOME TAX ORDINANCE Says something you believe it and apply it acordingly without arguing for logic....
similarly with other standards and Auditing....
BUT WHEN HOLY QURAN THE BOOK OF GUIDANCE SAYS SOME THING
YOU ARGUE It.
MAY ALLAH GIVEYOU PEOPLE HIDAYAT
(this was put farwards by my teacher KP)
ALLAH HAFIZ
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Azeem Shah Khan
Manager
United Kingdom
706 Posts |
Posted - Jun 23 2004 : 11:19:55 PM
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Dear Suhaib
Walaikm assalaam
Thanks for appreciating my views. Please forward my salaam to KP, who was my teacher as well some time back.
i slightly disagree with u on the ARGUMENT thing. i believe one should argue everything no matter what it is, not because WE have doubts about the authenticity but because argument forces u to think and when u think - u come to know the deeper understanding of the book.
this is particularly important when u face non-muslims, u have to know the logic behind every verse of QURAN so u can convince them why Islam is the only SENSIBLE religion.
not only re Interest, we should also think of other aspects of Islam and i can assure u that u will be able to come up with extremely sound reasonings.
i would appreciate ur comments.
Kind Regards
Azeem
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AIM
Unregistered Trainee
Pakistan
10 Posts |
Posted - Jun 24 2004 : 02:24:58 AM
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Hi
How is interest the main reason for inflation? Europe and US are trying to control inflation. If they were to lower the interest rate to NIL, I believe the inflation would increase.
If interest is Haram, then what are the alternatives to use? The Sharia product such as leasing, markups etc are essentially the same as interest, just a different name to please the Mullahs.
Since we are not living in a pure Islamic world, including the social aspects, trust between people etc, I guess there is no choice but accept interest as a way of life.
Regards
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sumaaan
Moderator
472 Posts |
Posted - Jun 24 2004 : 09:41:28 AM
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quote:
Hi
How is interest the main reason for inflation? Europe and US are trying to control inflation. If they were to lower the interest rate to NIL, I believe the inflation would increase.
If interest is Haram, then what are the alternatives to use? The Sharia product such as leasing, markups etc are essentially the same as interest, just a different name to please the Mullahs.
Since we are not living in a pure Islamic world, including the social aspects, trust between people etc, I guess there is no choice but accept interest as a way of life.
Regards
There is a significant but delicate difference between Interest and Riba... Interest can be Riba, but not always.
And yes the Interest in Shariah is not Riba... Just like Al-Meezan Bank, they offer Interest, but that is not Riba.
The problem with us these days, including me is, we don't have sound basics of Islamic trends and customs... I would highly recommend everyone to once visit Al-Meezan Bank.
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Azeem Shah Khan
Manager
United Kingdom
706 Posts |
Posted - Jun 24 2004 : 1:38:27 PM
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Dear Sumaan and AIM
there are thousands of reason WHY INTEREST / RIBA IS HARAM.
as i suggested in my earlier msg, please read a book called "Sood" by Maulana Maudoodi. It will clearify most of your points if not all.
i can answer all ur questions but unfortunately time doesnt permit me to do that. secondly i simply dont like talking in the air, i would like my views to be backed by sound logics and reasoning and for that i need to refer to various books.
i shall try to answer ur queries myself, if i can
Regards
Azeem
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sumaaan
Moderator
472 Posts |
Posted - Jun 25 2004 : 02:32:49 AM
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quote:
Dear Sumaan and AIM
there are thousands of reason WHY INTEREST / RIBA IS HARAM.
as i suggested in my earlier msg, please read a book called "Sood" by Maulana Maudoodi. It will clearify most of your points if not all.
i can answer all ur questions but unfortunately time doesnt permit me to do that. secondly i simply dont like talking in the air, i would like my views to be backed by sound logics and reasoning and for that i need to refer to various books.
i shall try to answer ur queries myself, if i can
Regards
Azeem
Thankyou for your willingness to help... Would you point out why Al-Meezan bank is paying out Interest for investment if you term Interest as Haram?
I know the answer, but I would like you to highlight this matter.
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Azeem Shah Khan
Manager
United Kingdom
706 Posts |
Posted - Jun 25 2004 : 11:19:32 PM
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Dear sumaan
am i appearing in a Exam???
being away from Pakistan i dont know what Al-Meezan bank does, however, i can definitely find out what they do or whether it is haram or halal.
here i would like to point out a fact that I have heard similar kind of responses from many people that if interest is haram then why
Al-abcxyz bank pay interest. we must understand that by putting "AL-" before any name doesnot mank a COMMERCIAL (interest paying) bank to a Islamic bank. we should also note that if a so-called islamic bank pays interest and calls it mark-up, profit or whatever it doesn't mean that rule about riba is wrong.
interest has nothing to do with what banks or muslims do, if u read my first msg u will find some very basic points why INTEREST IS HARAM and if u want to know more about it then please read a book "SOOD" by Maulana Maudoodi.
if u know the answer to ur question then please also enlighten our minds.
meanwhile i will try to find out the answers myself
Kind Regards
Azeem
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sumaaan
Moderator
472 Posts |
Posted - Jun 26 2004 : 02:08:20 AM
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quote:
Dear sumaan
am i appearing in a Exam???
being away from Pakistan i dont know what Al-Meezan bank does, however, i can definitely find out what they do or whether it is haram or halal.
here i would like to point out a fact that I have heard similar kind of responses from many people that if interest is haram then why
Al-abcxyz bank pay interest. we must understand that by putting "AL-" before any name doesnot mank a COMMERCIAL (interest paying) bank to a Islamic bank. we should also note that if a so-called islamic bank pays interest and calls it mark-up, profit or whatever it doesn't mean that rule about riba is wrong.
interest has nothing to do with what banks or muslims do, if u read my first msg u will find some very basic points why INTEREST IS HARAM and if u want to know more about it then please read a book "SOOD" by Maulana Maudoodi.
if u know the answer to ur question then please also enlighten our minds.
meanwhile i will try to find out the answers myself
Kind Regards
Azeem
Please try to go through the Page 2 of this thread... You'll find my answer there...
Shariah allows payment of interest as long as it complies with Shariah terms, just like Al-Meezan Bank operates (and also all other Saudi banks)... I have talked to various religious individuals who have proper knowledge about Islamic Economics... And they all have approved that Al-Meezan Bank's operations are in compliance with Islamic Economics.
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Azeem Shah Khan
Manager
United Kingdom
706 Posts |
Posted - Jun 26 2004 : 04:13:01 AM
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[/quote]
Please try to go through the Page 2 of this thread... You'll find my answer there...
Shariah allows payment of interest as long as it complies with Shariah terms, just like Al-Meezan Bank operates (and also all other Saudi banks)... I have talked to various religious individuals who have proper knowledge about Islamic Economics... And they all have approved that Al-Meezan Bank's operations are in compliance with Islamic Economics.
cant find the second half of ur msg...
could u plz elaborate what kind of interest COMPLIES with sharia law or ask ur friends who KNOW islamic economics and ASSURED u that interest given by Al-Meezan bank or Saudi banks is halal.
i would appreciate ur or ur friends comments.
regards
azeem
[/quote]
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sumaaan
Moderator
472 Posts |
Posted - Jun 26 2004 : 06:06:29 AM
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Hi Azeem,
Please visit the following links... They answer all the questions related to Islamic Banking:
www.meezanbank.com
www.meezanbank.com/knowledge.asp
I hope you'll find all the answers there... I would love to explain but my vague writing skills wouldn't do justice to the topic... However, I would still be pleased to explain myself if you have any other queries.
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Azeem Shah Khan
Manager
United Kingdom
706 Posts |
Posted - Jun 27 2004 : 03:39:20 AM
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thanx sumaan
i shall have a look at it
regards
azeem
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KJK
Unregistered Trainee
Pakistan
29 Posts |
Posted - Jul 04 2004 : 01:44:35 AM
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Well Here I think that If a person buys a car for Rs.10,000 on credit,he should pay the same price unless the value of money has increased or decreased.It is just like a provision which a lender makes that an amount should be charged over the original price so that the increase or decrease in the value of money or effects of inflation can be compensated.
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Canadian Pakistani
Unregistered Trainee
Canada
2 Posts |
Posted - Sep 03 2004 : 10:54:07 PM
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ASA everyone
I just read the whole discussion on this topic. I would like to add a few words here.
First of all, we must realize that the basis of Islam is "Iman". That's it. Even if we don't understand the reason behind a rule we have to accept it. There are some rules whose reason/justification we can understand, and there other rules we can't understand. This is because our knowledge and abilities are limited. Only Allah knows what is best. However, the more we study Islam, the more we understand the logic behind its rules. Further, there are many social and moral effects on society of our actions which we do not understand, but Allah knows and He has accordingly put forward rules.
Now, Riba is haraam. To my weak knowledge, Islam has not differentiated between interest and usury. Neither it has given the criteria for interest to be haraam to be exhorbitant/unjust. This is just part of the logic to interest's prohibition. There are some who say that Islam forbids usury but allows interest. But when I ask them what is the basis of this, then there is no answer.
Islam does not say that you can't have capital. Capital is a must. Islam only says that the remuneration of capital should not be based on interest, but on profit.
Also, the basis of transactions should be actual physical goods and services, not merely money being transfered from one hand to the other. Further, there should be some risk involved in the transaction, and not merely the credit risk.
There is a fine line between interest and profit. If you do it the correct way, it is halal, otherwise it is haraam. Just to give an example, the same act is halaal when married but otherwise it is haraam. When you are married you are responsible for everything, wife, kids and their social/moral behaviour also. Similarly, there could apparently the same transaction but one is halaal and the other is haraam.
For example, giving loan on interest to someone for buying an asset is haraam. But financing someone on morabaha is halaal. Some of the reason for this is that morabaha is itself based on an asset. The financier must first buy the asset and then sell it to the debtor. This involves financier's risk in the asset, though for a short time. Islam allows that a person could fix any price for an asset. (obviously, that price has to be market driven, otherwise the seller would be out of business). It is also allowed that the seller could charge different prices for sale on cash and sale on credit. This is because in credit sale charging premium for credit risk, market risk, opportunity cost is allowed.
The mullahs and moulanas are not against interest just for the sake of objection, but because of hurmat of it. It seems to be a fashion these days of critizing mullahs for everything. Someone said that the molanas don't come for rescue of poor peasants and fishermen. I don't know what kind of rescue is expected by that person. I have great respect for ulemas and molanas in general, recognizing that some mullahs, like the rest of us, are corrupt. But what they have not done is come up with practical solutions for dealing with modern, large businesses. Admirable work has been done by people like Molana Taqi Usmani, but a lot more work is required to be done. Instead of criticizing them we should present the problem to the ulemas and ask for their solution. Obviously, like in any field, not all ulemas are expert in all aspects of Islam. So for financial/economic issues, we should contact the relevant experts, e.g. Molana Taqi Usmani, for their solution.
Regards,
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Augustus
Unregistered Trainee
Pakistan
47 Posts |
Posted - Sep 04 2004 : 11:12:50 AM
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Salaam
I totally agree with you Canadian Pakistani and infact u have said what was in my mind but i shall only like to add certain things.
We actually now a days contacts Mullas and Moulanas for our problems and we want the solutions accordting to our expectations, if they don't answer what we want we simply say these persons are backward or not up-to-date and bla bla.
As you have mentioned Maulana Taqi Usmani ... i must say other readers to read his articles which are available on this site and u will find that islam gives the solution of every problem in it's own way, not the way we want.
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Pracs
Partner
United Kingdom
1542 Posts |
Posted - Sep 04 2004 : 12:37:23 PM
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Agreed with Canadian Pakistani and Augustus,.. but who is going to find the way out... little of shariah compliant banking that we have is not designed to be implemented en mass.. so what is the solution,? We cannot just shirk out of the Banking system all together.....
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Augustus
Unregistered Trainee
Pakistan
47 Posts |
Posted - Sep 04 2004 : 4:21:35 PM
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well Pracs i agree with u that it's not good to shift from today's banking system to sharia banking system but we should start strengthening our islamic banking system at the same time like Meezan Bank, Albaraka Bank etc ... as u must be very well aware of the fact that due to growing power of the local pakistani people each and every bank including foreign banks are opening their islamic system here in pakistan.
Islam dosn't allow us to be extermist, but we should gradually make our own system depending on our local customs and shariah rules and i m sure all these companies and banks will definetly work on such systems too
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Canadian Pakistani
Unregistered Trainee
Canada
2 Posts |
Posted - Sep 07 2004 : 10:03:04 PM
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At present we just can't reject the present banking system and adopt an "Islamic" system. What is needed is an active work deliberating on the subject, starting with the issues identified in the Federal Shariah Court judgment.
I think ICAP should take lead and join together with ICMAP, SBP and agencies like Islamic Council or Islamic Idealogy Council to work together in finding solution and ways and means to fully convert the banking system to an Islamic system. Careful review should also be made of the so-called Islamic banking system in Saudi Arabia, Malaysia and other countries/banks.
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