Professional Documents
Culture Documents
Islamic finance
AUSAF AHMAD
Prohibition of Riba in
Quran
FIRST REVEALATION:
That which you give as Riba
(interest) the peoples wealth
increases not with God; but that
which you give in Charity, seeking
the goodwill of God, multiplies
manifold. [ 30 : 39]
Prohibition of Riba in
Quran [contd.]
SECOND REVEALATION:
And for their taking interest even
though it was forbidden for them,
and their wrongful appropriation
of other peoples property, We
have prepared those among them
who reject faith a greivous
punishment. [4: 161]
Prohibition of Riba in
Quran [contd.]
THIRD REVEALATION:
Prohibition of Riba in
Quran [contd.]
FOURTH REVELATION
Those who benefit from interest shall
be raised like those who have been
driven to madness by the touch of
the Devil; that is because they say:
Trade is like interest while God
has permitted trade and forbidden
interest. [2: 275]
Prohibition of Riba in
Quran [contd.]
Prohibition of Riba in
Quran [contd.]
Prohibition of Riba in
Quran [contd.]
Riba in Hadith
From Jabir: The Prophet (pbuh)
cursed the receiver, the payer of
interest, the one who records it
and the two witnesses of the
transaction and said: They are all
alike (in guilt)
[Reported by Muslim, Tirmidhi and
Ahmad]
Riba in Hadith
[contd.]
Jabir b. Abdallah said: The Prophet
(pbuh) said, All of the riba of
Jahiliyah is annulled. The first riba
that I anul is our riba, that accruing
to Abbas b. Abd al Muttalib; it is
being cancelled compeletely.
[ Reported by Muslim and Ahmad :
Last Sermon of the Prophet (Pbuh)]
Meaning of Riba
TYPES OF RIBA
Meaning of Riba al
Fadl
AVOIDANCE OF
GHARAR
Definition of Gharar
Uncertainty / Ambiguity
Ambiguity of Quantity [Gharar fil
Miqdar]
Ambiguity of Attributes [Gharar
fis sifah] such as
Ambiguity in time or place of delivery
Ambiguity in price etc.
TYPES OF ISLAMIC
CONTRCTS
Islamic Contracts
Muwadat
Fixed Payment
No Gharar
Musharakat
Tabarruat
Some Gharar
Gharar is allowed
TYPES OF ISLAMIC
CONTRCTS [contd.]
DEBT FINANCE
Vs.
PARTICIPATORY FINANCE
Participatory finance, in
comparison, to debt finance is:
More just
More equitable
More efficient
More growth oriented.
DISADVANTAGES OF
RIBA BASED FINANCE