INTEREST

Submitted by Ben Othman (Malaysia), Sep 24, 2010 at 06:17

Greetings Dr Pipes, Mohamad (CPA ) and Rajeev..

Ban on Charging Interest/Sharia is wrong.

This is a big topic and statements on it made were wrong, inaccurate and reflect the insufficient level of knowledge on that subject by both contributors.

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Riba " was widely and intensively discussed by Muslim scholars since the dawn of Islam.The Prophet left sufficent explanations on the subject and these are found in the Alhadith.Muslim scholars basing on the general principles in the Quran and the guidelines and explanations in the Ahadith , continuously and untirelessly expounded on the subject from one period to another, never for once forgetting that transactions related to 'riba' ranks second to shirkh; blasphemying God and associating Him with a partner.For God and His Messenger have Declared war on those involved in 'Riba'.The subject was discused and solutions provided before Ricardo and western economists were even born.Islamic 'interest and usury -free 'economics flourished to great heights in Andalusia, Ottomon Empire and Abbasid Empire.

What is 'Riba'?

.Riba is not only usury as the usury defined and understood through reading preliminary western economics books.

In Islamic "economics' ( if there is such a word ) that is fiqh Muamalat , 'riba' is ANY EXCESSES from amount of money, food materials or any other commodities LENT ( LOANED ) obtained by the LENDER from the BORROWER in a LOAN CONTRACT .(Aqad l Qard )عقد القرض.In muamalat( those that concern man to man reationship--trading, marriage etc ) loan from one man to another are on benevolent basis .No excesses ( profit ) whatsover are allowed .Meaning there is no such thing as" lending with profit" business in Islam.

It will take a lot of space to explain the reasons behind the total banning of any form of riba--be it usurious or a miniscule 0.001 %.Suffice to say with conviction that lending practices with interest as 'profit ' breeds scheming selfish capitalists,greedy middlemen bankers and people like Madoff,and gullible small depositors.History showed us over and over again yet we refused to notice that it is the 'riba' system that is the main culprit of financial crisis.

To embark on business to seek profit, there is trading and contracts of exchanges as well as Profit and Loss sharing.Thus there are contracts of buying property with deferred instalment , Leasing and Profit and Loss sharing on investments. These are not LENDING transactions but those related to sale and purchases, rentals etc.Concept of money as commodity and interest as price of money has no place in these transactions.Interest as a factor of production is a recent invention and innovation conjured by groups of people out to exploit the poor and the naive.

These are not recently invented methods and avenues.They were there since 1300 years ago and those principles are now actively applied and practically adopted and adjusted by Islamic Banks and Islamic Funds Managers.

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