Riba

Riba (Arabic ربا, DMG RIBA ) designated according to common interpretation of the prohibition of monetary interest in the Islamic world.

Under Islamic law, the Shari'a, which prohibits the collection and payment of interest. Muslims according to the Koran, it is not allowed to charge interest, nor to pay. Thus, a Muslim or grant no -interest loans or mortgages to complete.

Definition

The Islamic financial system is characterized in that it has to be consistent with the Shari'a. One of the fundamental elements of Islamic commercial law is an explicit prohibition of Riba-. Here, under Riba is understood by a independent and established by the performance in advance for the usage of funds (interest ) any form of ethically unjustified increase of capital.

This is in the Quran, Surah two, verse 275 clearly:

"Those who take interest ( w. consume ) will ( one day ) not ( so that he can no longer maintain ) stand except as stands one who is captured and beaten by Satan. This ( is their punishment ) ( be ) to it that they say. > For Sale business and Zinsleihe are one and the same < But God has ( now again) the sale and purchase permitted and prohibited Zinsleihe ".

The distribution of dividends is not affected by this prohibition.

Background of the interest prohibition

Islamic jurists and Islamic scholars distinguish between two types of Riba:

• A capital increase without consideration ( forbidden by the Koran )
• An unequal exchange of goods - goods (forbidden by the Sunnah )

Riba was forbidden as well as in medieval well in the "Medi niche" company of the Prophet of Islam - Christian world. Historically, forbade any one loan, which tended to increase the repayment.

Riba is one particular with the six cardinal sins of the Quran ( Al- Saba al - Mubigat ):

• Faith in other gods besides Allah
• Murder
• Riba
• Unlawful appropriation of money for orphans
• Escape in the battle
• Accusation of chaste, pious women

In the Koran, Sura three, verse 130 is written:

" O you who believe! Do not take interest, ( by her) in multiple amounts (again, take what you have borrowed her)! And fear Allah! Maybe it is you ( then ) go well. "

The Prophet Muhammad said in his farewell speech:

" Allah has forbidden usury to operate. Therefore the future I will waive all usury. "Your wealth is what you own yours. You will neither suffer nor produce injustice, God has determined that there shall be no riba and that forgoes any usury from now on. "

The Koran prohibits usury thus explicitly. Since the Koran is considered the undisputed source of guidance, all agree to the prohibition of usury.

The Qur'an continues to make it clear that usury is forbidden but allowed trade. It is further written that whoever the guidance of God accepted, must immediately refrain from usury and those who return to usury against God's Steering playing with fire. God fought against usury and rewards those who are charitable. Muhammad condemned the recipient, the payer, the contract writer and the witnesses of the contract and says:

"They are all the same ( in their debt ). "

The Islamic Sharia is understood Riba as an instrument of oppression in order to generate by exploiting the needs of others money. Therefore Riba is prohibited by the system and promoted charity as an alternative. Mohammed goes on to say:

"God has decided that no Riba may take place. "

In the Muslim world, the consumption of pork and alcohol is prohibited. However, the exercise of Riba is much worse to assess, even worse than adultery and according to Mohammed even worse than adultery with his own mother.

Other sources of prohibition in the Qur'an:

" God lets destroys interest ( the usurer ), but it bears interest alms ( with heavenly reward ). God loves not is entirely disbelieved and a sinner. "

" O you who believe! Fear God! And let the future usury stay when ( otherwise) are you a believer! "

" [ ... ] And (because they are ) took usury, where it was forbidden to them, and people brought to their assets in a fraudulent way. For the unbelievers of them we have ( in the Hereafter ) prepared a painful punishment. "

"And what do you give to Zinsleihe ( for the purpose ) that the assets of people ( anwachse and you) transferring interest that brings any interest in a God. But if you devoutly ( w. by you want only the face of God ) give alms - (the so act ) are the (their credit actually ) double (or multiply ) ".

Interpretation and controversy of the interest prohibition

The origin of some of the controversy between the views of the modernists and conservatives in terms of Riba dates from the early Islam and revolves around the question of what kind of Riba has the Koran really prohibited. The term modernists here means " Muslim scholars of the present" as Fazlur Rahman, Muhammad Asad, Sa `id al -Najjar, Sayyid Tantawi and others. They believe, a Riba- ban would exploit the poor more than the interest itself

There are two types of Riba

• Riba al - nasi'ah relates to interest on lending and lending
• Riba al -Fadl relates to interest on the purchase and sale

One view Riba was understood in the early days of Islam as a loan of money and food. Anything beyond that developed later. Another authoritative opinion states that riba al -Fadl comes from the Hadith, but no attempt to define Riba based on the hadith was successful. A recent article claims that Riba exists in both sales and rentals before Islam, which is the Koran also unique. In addition, the hadith and legal formulations elaborations and extensions of the basic Qur'anic concept. It is also argued that riba al -Fadl only a development of Riba is al - nasi'ah, since money can be transformed into a commodity.

The controversy in its present form focuses on:

• The definition of Riba itself,
• Whether Riba only concerns the gains from interest-bearing loan with exploitation of the economically weak by the strong and rich incident or runs through all kinds of loans regardless of the application,
• Whether the prohibition is the form of Ribaverbots, which was practiced in the pre-Islamic period,
• Whether it usury, but not interest or the charging of interest in principle prohibits
• Whether it relates to loans for consumption or investment in a business venture,
• Whether it prohibits nominal or real interest rates,
• Whether the prohibition of compound interest or even for simple interest applies,
• And whether the prohibition applies to the borrower as an individual or institution.

According to the modernists additional fees within the meaning of interest are allowed, depending on their use:

In contrast to this rather pragmatic point of view, the conservative view prohibits any form of fixed and predetermined interest rates. You look for delivering a fixed amount which exceeds the amount of the loan, as forbidden by the Koran. In this sense, interest, whether grossly or appropriate, in addition to borrowed capital a form of Riba and thereby do not the Koran. Thus, Riba is defined as any predetermined fixed return for the use of money.

Three main reasons for the strong condemnation of Riba in Islam are:

Prohibition of interest because of exploitation and injustice

Modernists tend to emphasize the moral aspect of the prohibition of Riba and argue that injustice and hardship were formulated in the Quran as reasons for the ban. You will also find some support for their views in the works of some early scholars like Imam Razi and Ibn Qayyim al - Dschauziya who think that everything is forbidden, which exploits the poor. Many writers try this direction between different forms of interest, which are used in the conventional banking system to distinguish, with some defending the legality and at the same time reject others. In contrast to this view, one could argue that the reasons for the prohibition of Riba in the Qur'an is the creation of an economic system in which all forms of injustice and exploitation are eliminated, particularly the donor guarantees a profit without thought or participation in risk gets, while the entrepreneurs despite their high level of commitment and hard work not receive a guaranteed profit. The prohibition of Riba is therefore a way to create justice between lenders and borrowers.

Pre-Islamic Riba

It was claimed by some modernists that which is forbidden in the Koran, is the form of Riba, which refers to the then prevailing practice of lending in the pre-Islamic period. The collection of Riba was seen in pre-Islamic times and Arab territories as odd. The debtor had a fixed amount to be paid above the loan amount for the use of borrowed money over a certain period. This additional amount, which could even be greater than twice the loan amount was prohibited by an injunction of the Koran. According to this view, the first increase is legally in a loan, but if at maturity a temporal shift of the due date decided, the shift towards a further increase is prohibited.

Interest and Usury

Another controversy relates to the injunctions of the Koran against Riba, whether "interest" or " usury" are meant. Modernists argue that Riba which are prohibited and where there is a matching opinion, interest rates are, which are the loan amount equal to or higher, but not usury.