Interest in Islam - English Essay
Interest in Islam
English Essay on "Interest in Islam"
Islam is not a religion, simply preaching the Oneness of God, faith in His messengers and a few religious rituals. On the contrary it is a complete code of life, which enshrines the entire activities of a normal human being. One of the most striking feature of Islam in justice and brotherhood. Entire edifice of Islam is based, on these two concepts. Belief in oneness of God and its messenger is a justice, not with the God but onto yours elf, into your soul and flesh. Divinely words are:
And the sky He hath uplifted and He hath set the
measure, that. yee exceed not the measure, but observe
the measure strictly not fall short thereof. (55, 7-9)
Maudoodi in his Tafheem writes that all the commentators of the Holy Quran have taken justice as the meanings of Measure. Set the measure, signifies that God has established the whole system of universe on justice and since we are living in a universe which is based on justice and harmony, we too have to lead our lives in a manner based on these two noble concepts. Our religion teaches that all activities social as well as economic must converge towards justice and equity. Any deviation from the above rule shall end in a social and economic chaos, apart from earning the Wrath of God. The Quran strongly criticises and condemns these who wrongfully and illegally acquire the wealth and property of others. See the Divine verdict:
And eat not up your property among yourself in vanity, nor seek it to gain the hearing of the judges that yee may knowingly devour a portion of the property of other wrongfully. (2: 188)
All business transactions must be based on justice and equity and exploitation of any manner is strictly forbidden. Any deal in which return to one party is guaranteed and to the other uncertain is void and is disapproved by Islam.educationsight.blogspot.com It is because of this reason that interest (nba) has been strictly forbidden in Islam.
Any business deal where borrowed money is involved and return to the vendor is guaranteed but not to the actual user of capital, even if the borrower incurs losses, he has to return the principal along with. Such an unjust business deal is not approved by Islam, because the lender who is getting positive monetary benefit is not giving a just counter value to the second party. In the Holy Quran God revealed unto the Holy Prophet (PBUH) the prohibition of riba at different places.
That which yee give in usury in order that it may, increase on (other) peoples property, hath no increase with Allah but that which yee give in charity, seeking Allah ‘s countenance, hath increase many times. (Airum: 39)
Maudoodi in his Tafheem writes that here is economic and moral difference between the two. In trade profits is divided between the seller and the buyer on equal basis because while selling the commodity he earns profit on it, which he has purchased from the vendor and the vendor in return charges for his mental, physical labour and time which he has put in for the procurement of that commodity on the contrary in a business deal involving interest, the Financier ensures in advance positive return on loan as a reward, for waiting. But in Islamic Shariah waiting is no justification for such a positive return.
Secondly, in trade the seller receives the profit only once After he had sold the product transaction in complete. Relationship between the buyer and seller is terminated. But in case of financial deal based on interest, the lender charges profit on its money continuously for an indefinite period and with the passage of time amount of interest starts swelling and soon a time comes when amount of interest becomes larger than the principal and the poor borrower finds himself in such a vicious circle that for the whole life he becomes a slave to the tender.
Thirdly in trade, commerce and farming, man sells his prudence, ideas, labour and time but in a deal where interest in involved, the Financier by offering money which he owns in excess of his needs and requirements, become the share hold in the income of other, earned by them with their sweat and toil. Painful aspect is lender ensures his return irrespective of the fact, that the person who actually works hard, strives and lab ours untiringly may not earn any profit at all.
Today rich nations of the world have been able to dominate the poor countries not through sword or gunpowder, but through various economic and monetary toll of which interest-based lending on lower rate of interest apparently, is the most important one. Such circumstances are created that the poor countries do not find any other way but to accept their conditions of tied loans. This is what we may call economic colonialism.
In an interest based transaction return to the lender is guaranteed, guaranteed in such a manner that it increases in a geometric progression. It is because of this reason that a very wide gap occurs between trade and interest. Trade helps in building human culture based on justice, brotherhood and equity while the interest demolishes the edifice of fundamental human values and gives rise to selfishness, one’s own interest and advantages at the cost of happiness and welfare of other. It perpetuates meanness arid cruelty leading to Machiavellian approach towards life.
From purely economic viewpoint in an interest based society all the liquid sources of wealth tend to flow towards these avenues where return is equal or more than the prevalent rate of interest irrespective of the fact that such projects are the needs of the economy or not. Lender is not concerned with their adverse effects on the society. His interest is only a guaranteed return on his investment. Therefore, these segments of the economy which are very important from national viewpoint suffer from lack of capital and they simply say, capital is shy for socio-economic avenues of investment. Take the case of our own country, entire banking sector has been quite averse towards agricultural sector of economy till such time the banking industry was nationalised. Agriculture sector which was in dire need of capital and on whom 65% of the total population depends to meet its requirements, remained completely ignored. by the commercial banking.
Secondly in an interest-based economy, the lender is not at all concerned with the social aspects of the projects, even though they are harmful and dangerous for the society, of which he himself is a member, he is not to worry as long as his investment brings him a return.
These are two main drawbacks of interest which anybody having knowledge’ of economics will not deny.
Riba in Hadith:
Now coming to the golden words of the Holy Prophet (PBUH) which we find in hadith. The Holy Prophet (PBUH) said:
God would be justified in not allowing four persons to enter paradise or taste its blessings. He who drinks habitually, he who take Riba, he who usurps an orphan‘s property without right and he who is undutiful to this parents. (Mustadrak from Abu Hurayrah)
From the above quoted Hadith it is evident how strict the Holy Prophet (PBUH) was with regard to interest (riba).
What to talk of getting a return on the loan granted to someone’. The Holy Prophet (PBUH) clearly forbade even getting a minor gift from the loanee, such gift or a facility from the borrower in Shariah is no more than interest (riba). Before concluding this essay one would like to have answers from the Muslim clergy on the following points.
A Muslim society is not such as to have laws, legislatures and statutes independent of each other. On the contrary it is a well-knit society, so well-integrated that commands given by God are closely related to each other, not such that you obey the one and disregard the other. You have to be abide by these commands and mandates totally. Divine words are:
O Muslims enter into Islam in its totality, and follow Not the footsteps of the Devil for he is your obvious enemy. (2:208)
If one tries to observe these commands of Allah in a piecemeal manner it won’t help achieve the desired objectives, rather it shall weaken the system. It is not possible to have an equity based, interest-free economy without observing and adhering to other fundamentals of Islam. Economic system based on Islamic values demands a society based on justice and brotherhood.
And the sky He hath uplifted and He hath set the
measure, that. yee exceed not the measure, but observe
the measure strictly not fall short thereof. (55, 7-9)
Maudoodi in his Tafheem writes that all the commentators of the Holy Quran have taken justice as the meanings of Measure. Set the measure, signifies that God has established the whole system of universe on justice and since we are living in a universe which is based on justice and harmony, we too have to lead our lives in a manner based on these two noble concepts. Our religion teaches that all activities social as well as economic must converge towards justice and equity. Any deviation from the above rule shall end in a social and economic chaos, apart from earning the Wrath of God. The Quran strongly criticises and condemns these who wrongfully and illegally acquire the wealth and property of others. See the Divine verdict:
And eat not up your property among yourself in vanity, nor seek it to gain the hearing of the judges that yee may knowingly devour a portion of the property of other wrongfully. (2: 188)
All business transactions must be based on justice and equity and exploitation of any manner is strictly forbidden. Any deal in which return to one party is guaranteed and to the other uncertain is void and is disapproved by Islam.educationsight.blogspot.com It is because of this reason that interest (nba) has been strictly forbidden in Islam.
Any business deal where borrowed money is involved and return to the vendor is guaranteed but not to the actual user of capital, even if the borrower incurs losses, he has to return the principal along with. Such an unjust business deal is not approved by Islam, because the lender who is getting positive monetary benefit is not giving a just counter value to the second party. In the Holy Quran God revealed unto the Holy Prophet (PBUH) the prohibition of riba at different places.
That which yee give in usury in order that it may, increase on (other) peoples property, hath no increase with Allah but that which yee give in charity, seeking Allah ‘s countenance, hath increase many times. (Airum: 39)
Maudoodi in his Tafheem writes that here is economic and moral difference between the two. In trade profits is divided between the seller and the buyer on equal basis because while selling the commodity he earns profit on it, which he has purchased from the vendor and the vendor in return charges for his mental, physical labour and time which he has put in for the procurement of that commodity on the contrary in a business deal involving interest, the Financier ensures in advance positive return on loan as a reward, for waiting. But in Islamic Shariah waiting is no justification for such a positive return.
Secondly, in trade the seller receives the profit only once After he had sold the product transaction in complete. Relationship between the buyer and seller is terminated. But in case of financial deal based on interest, the lender charges profit on its money continuously for an indefinite period and with the passage of time amount of interest starts swelling and soon a time comes when amount of interest becomes larger than the principal and the poor borrower finds himself in such a vicious circle that for the whole life he becomes a slave to the tender.
Thirdly in trade, commerce and farming, man sells his prudence, ideas, labour and time but in a deal where interest in involved, the Financier by offering money which he owns in excess of his needs and requirements, become the share hold in the income of other, earned by them with their sweat and toil. Painful aspect is lender ensures his return irrespective of the fact, that the person who actually works hard, strives and lab ours untiringly may not earn any profit at all.
Today rich nations of the world have been able to dominate the poor countries not through sword or gunpowder, but through various economic and monetary toll of which interest-based lending on lower rate of interest apparently, is the most important one. Such circumstances are created that the poor countries do not find any other way but to accept their conditions of tied loans. This is what we may call economic colonialism.
In an interest based transaction return to the lender is guaranteed, guaranteed in such a manner that it increases in a geometric progression. It is because of this reason that a very wide gap occurs between trade and interest. Trade helps in building human culture based on justice, brotherhood and equity while the interest demolishes the edifice of fundamental human values and gives rise to selfishness, one’s own interest and advantages at the cost of happiness and welfare of other. It perpetuates meanness arid cruelty leading to Machiavellian approach towards life.
From purely economic viewpoint in an interest based society all the liquid sources of wealth tend to flow towards these avenues where return is equal or more than the prevalent rate of interest irrespective of the fact that such projects are the needs of the economy or not. Lender is not concerned with their adverse effects on the society. His interest is only a guaranteed return on his investment. Therefore, these segments of the economy which are very important from national viewpoint suffer from lack of capital and they simply say, capital is shy for socio-economic avenues of investment. Take the case of our own country, entire banking sector has been quite averse towards agricultural sector of economy till such time the banking industry was nationalised. Agriculture sector which was in dire need of capital and on whom 65% of the total population depends to meet its requirements, remained completely ignored. by the commercial banking.
Secondly in an interest-based economy, the lender is not at all concerned with the social aspects of the projects, even though they are harmful and dangerous for the society, of which he himself is a member, he is not to worry as long as his investment brings him a return.
These are two main drawbacks of interest which anybody having knowledge’ of economics will not deny.
Riba in Hadith:
Now coming to the golden words of the Holy Prophet (PBUH) which we find in hadith. The Holy Prophet (PBUH) said:
God would be justified in not allowing four persons to enter paradise or taste its blessings. He who drinks habitually, he who take Riba, he who usurps an orphan‘s property without right and he who is undutiful to this parents. (Mustadrak from Abu Hurayrah)
From the above quoted Hadith it is evident how strict the Holy Prophet (PBUH) was with regard to interest (riba).
What to talk of getting a return on the loan granted to someone’. The Holy Prophet (PBUH) clearly forbade even getting a minor gift from the loanee, such gift or a facility from the borrower in Shariah is no more than interest (riba). Before concluding this essay one would like to have answers from the Muslim clergy on the following points.
A Muslim society is not such as to have laws, legislatures and statutes independent of each other. On the contrary it is a well-knit society, so well-integrated that commands given by God are closely related to each other, not such that you obey the one and disregard the other. You have to be abide by these commands and mandates totally. Divine words are:
O Muslims enter into Islam in its totality, and follow Not the footsteps of the Devil for he is your obvious enemy. (2:208)
If one tries to observe these commands of Allah in a piecemeal manner it won’t help achieve the desired objectives, rather it shall weaken the system. It is not possible to have an equity based, interest-free economy without observing and adhering to other fundamentals of Islam. Economic system based on Islamic values demands a society based on justice and brotherhood.
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