Allah clearly defines usage of
goods and services for
betterment of humanity.
Prohibited anything or any act
that is harmful to humankind.
Creating instability, injustice
injurious to human life
considered unconstructive to

Socio Economic System.

There is a confusion with gap of understanding
for the terms
Interest, Profit & Riba (Usury).
Is interest is Riba (Usury)?
Riba is Interest?
To make a distinction of terms with rational
reasoning, Islam through definitions and
interpretations, provided in
Holy Quran and Hadiath

Abul Ala Maududi,
Riba is an earning on lending of money by lender
from Brower on condition that lender shall
charge a fixed amount of money in addition to
the principal.
Interest is prohibited in Islam and people are not
allowed to make money by leading their capital
on interest.
Capital to invest in productive manner that
increases the profits.

Western economist Keynes
defined "interest has nothing to do
with influencing volume of
savings. Practically it is rate of
return on investment that
determines rate of saving”

Holy Quran on RIBA
Holy Quran clearly inform that
 It is clearly indicated that Riba must
be eliminating from the financial
transactions. Nothing is more horrific
as compare to Riba that Islam has
 Nothing more dreadful than Riba,
that remains in widespread
threatening to socio economic

“Ye who believe! Be careful of

your duty to Allah, fear Him and
give up what remains of your
demand for Riba, if ye are true
 “But if ye turn back and ask
forgiveness, then ye shall have
your capital sums, neither shall
you make the debtor suffer loss,
nor shall you be made to suffer

Greek researcher &
philosopher “Aristotle” on
Interest in his book “Money
and Politics”.

“Interest is an artificial profit, which does not
enter in legal trading. Using money as a
commodity which is on selling is just a forged
artificial transaction. Money has to be used as
a means of sale and purchase and a
measurement of a commodity to be sold or
purchase. Money is just means to ascertain
value of commodity and it cannot be sold or
purchased within similar qualities”.

Prophet Moses May Peace be Upon him
Torah 22nd versus of the

If you lend money to
any of my people with
you who are poor,
you shall not be to
him as an exact Riba
from him.”

Versus 23rd of the
“You shall not lend upon
Riba to your brother,
Riba on money,
Riba on virtual,
Riba on anything that is
lent for Riba.”

Ancient Hindu Religion
 Vasishtha, a well known Hindu law-

maker made a special law which forbade higher
castes of Brahmans (priests) and
Kshatriyas (warriors) from being usurers
or lending at interest. Vedic texts of
Ancient India
(2,000-1,400 BC )

In the Jatakas, (600-400 BC). usury is
referred to in a humiliating manner: “Two-

 Criticism

of Riba in Judaism

has its roots in several Biblical passages
in which the taking of interest is either
forbidden, discouraged or contempt.

 Roman

Catholic Church in fourth

century AD prohibited taking of interest
by clergy .
In the eighth century under Charlemagne
it was declared usury to be a general
criminal offence.

Anti-usury movement gain
momentum during early Middle

Income on Financing determine not
on Financing Amount, but taking
Principal Amount, Cost of
Transaction and applicable fee &
charges as a part
Profit is aim of Financing & Loss is
acceptance & precaution
Trust, confidence, will & sprit are
business ethics

Any earning, income, profit or benefits
being earned, taken or received through
wrong means, bad intentions, shady
practices or wicked participation are
classified as RIBA.
Such earnings & benefits are not only
treated as immoral, injustice & filthy but
furthermore negative to socio economic
life of society.
Such earning leads to crimes of various
nature, cruelty, exploitation & selfimportant.

Any amount, earning or income that is
taken over and above to principal amount,
without any risk, efforts and activity
without loss sharing.
This compulsory return, income, earning on
a fixed term & fixed percentage, upon
principal amount, is an Interest.
Interest is the price of money whereas
money is just an intermediary between
exchanges of transaction.

Riba is as an combination of evil &
sins, whereas Interest categorized as
one of elements of Riba.
Riba is bad practice to earn & gain
while Interest is price of Wealth,
demanded for assistance and need of
money from the user by the lender”.
There are many categories of Riba,
Interest is one of the categories
among them.

Now the question arises
If Interest eliminated from monetary
system, would it be possible that system &
transactions would become transparent
and clear? Answer is simple and straight:
“Filth remains in its hard and powerful grip
irrespective of other factors”.
Interest alone cannot be eliminating
without eliminating categories that fall
under Riba.

Classifications of Riba
Some of the categories are mention and
clearly defined in Islamic Economics.
Islam strictly prohibits these as well as
society disregard them due to their
dreadful effect on social, moral, cultural,
economical, financial and legal life styles
of the society. :

The main classes of RIBA
are as follows

Exploitation by taking advantage of
status and position,
Irregular weight & measures for
Wrong declaration for higher return,
Misconduct (misbehavior),
Felony & Law breaking,
Breaching/ false commitment,

Manipulation of affairs for benefits
at a cost and efforts of other,
Gambling in all form,
Making promise by covering
honorable, nearest, dearest or
lovable to secure the benefit,
Fabrication, Lies
Speculation, Conjecture, unfounded

Trading of commodities prohibited
Islam and law of the land,
Income from the practices or
activities that are prohibit by Islam,
Breaking and abuse of state law for
self benefit or for any purpose that is
declared as punishable act.
Disobedience the state law by
declaration and submission of wrong
information for self-benefits.

Disturbing the peace of the community
and using the force and illegal act.
Interest that is the price of money taken
in cruelty, exploitation, wrong means,
false declaration, and advantage based
on weak or wrong calculation,
Return on loans on fix return without
appraising the usage of funds given to
user of fund,
Keeping deposit with person or
institution having involved in Riba

Using deposits as investments and
declaring non-transparent results
that led to discrimination of
sharing in accordance with
investment percentage,
Holding/storage of currency or
commodity that affects economic
activities negatively,
Storage and holding of
commodities that leads to scarcity
in supply of any commodity against
the market demand,

Monopoly and monopolization of
activity, transaction and business to take
sole benefit, stopping the growth of
employment and earnings
Grabbing the wealth,
Illegal encroachment on the property
that is not owned by encroacher. For
example, construction of Mosque on the
property that was not purchased, gifted
or legally transferred to title made,

Using public money for luxuries and selfusage,
Misusage of rights belonging to minors,
orphans, widows and women,
Misappropriations among share division
incase of profit or inherited wealth,
Miscalculation of share for inherited
wealth under law of inheritance,
Income by power and cruelty,
Misuse of power and status,

Human trading,
Pressurizing and influencing
of earning situation and
taking benefits,
Misuse of public
representation and
obtaining benefit through

Misuse of ownership right on the
commodity by charging over and above
the prevailing price, furthermore,
avoiding payment to state, that is its
right toward revenue, by hiding the
earning to such transaction. (Premium
on commodity for extra benefit),
 Abuse of labor, especially child and
Above classes differentiate between
status of Interest vis-à-vis Riba

Fundamental Facts on Riba
Bases of Islamic thoughts
conflict directly with the Riba
based system.
“No Islam exists in a place where
there is Riba based system”.

Riba based system is a misery on
humanity as faith, morals or
imagination of life, but also in every
core of economic and practical life.
It is the most hateful system, which
eradicates human satisfaction and
frustrate its civilized and neutral

Islam has complete ethical
system supported by realistic
system as interlink.
Ethnics & reality cannot separate
in Islam & cannot be practice
Islam has clearly stated benefits
of followings of ethics & reality
and followers follow in daily life.

 Successful Islamic economics

does not rise without Ethics
which cannot be separate to
reality of life and its rational
 Practical life of people cannot
prosper without proper ethics.

Riba practices corrupt the
individual’s ethics, behavior,
and feelings towards
community and the society.
It also corrupts the human life,
culture and the relationship by
spreading the spirit of greed,
selfishness, sneakiness and
gambling in general.

 Today

investing capital on
minimum risk bases over
guaranteed return is commonly
practice including funds as
deposit invested on no risk with
guaranteed return.
 Interest is paid at lower to the
depositor’s investment and
higher to investment managers
and shareholders.

 Money let somebody use on

higher return on interest does
not grow useful projects but
seeks the most lucrative
opportunity even if profit
comes from the lowest nature
and the meanest tendency.

Islam is a connected system as it
prohibits the dealing with Riba.
It also defines all its systems based
on providing the need to it.
It organizes the aspects of social
life on giving out means of
dealing without touching
growing human, social &
economic development.

A true Muslim should have a firm
belief that whatever Almighty
Allah has prohibited, can develop
human life in better and fair way.
It must be kept as a firm belief to
restrain from false and evil acts
for the betterment of life with its
development and growth in
Almighty Allah is the Creator of

 Mans

determination towards
the Almighty Allah overcome
all and guides the man to the
right path.
 It is also impossible for the
Muslims to raise the
community in prosperity or
the perception that
wickedness can show the way
to advancement, if going

Riba Al Nassieah
Riba al Nassieah practice before
Islam because as the man had to
pay his money to another for a
pre agreed period.
 In return, he took from him a
certain amount every month
without taking the principal
 When date of payment came, he
asked him for his capital and if

Riba Al Fadi

A man sells an article in exchange of another
article having same quality and nature with an
increase or decrease as like gold sold for gold,
rupee for a rupee, corn for corn and barley for
This kind is considered as Riba as commodities
are similar to each with different values not
Such transaction has the involvement of
exploitation and injustice on any one’s part of
the two.

Riba system emerges initially on
a rule that there is no
relationship between the
determination of Allah and the
life of man.
 Riba create the false feeing in
the mind of men that wealth
ownership would bring the
power to become the master of
this earth. It instructs the men
to not to get bound by a pledge
himself from Allah and to ignore

Riba establishes a feeling of
liberty among humans for
ways and means of obtaining
wealth, encouraging them to
adopt more unfair means t
multiply it.
 Riba provides an individual a
feeling that he is free to
enjoy his wealth without
abiding the contract of faith
and trust in Almighty Allah or

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