Presented To:

Dr. Salman Ahmad Khan

Presented By

• Waqas Ansari (1367)• Zuqarnayn Shehzad (1285)• Aamir Shehzad (1304)• Saad Munir (1305)• Harib Muzafar (1263)• Syed Shahtaj Ahmad (1299)

Riba (Interest)’s Prohibition in Islam and Other Religions

Surah Al Imran• O you who have believed, do not consume

usury, doubled and multiplied, but fear Allah that you may be successful. (130)

• And fear the Fire, which has been prepared for the disbelievers. (131)

• And obey Allah and the Messenger that you may obtain mercy. (132)

Surah An Nisah: Verse 161• And [for] their taking of usury while they had

been forbidden from it, and their consuming of the people's wealth unjustly. And we have prepared for the disbelievers among them a painful punishment.

Surah Ar Room: Verse 39

• And whatever you give for interest to increase within the wealth of people will not increase with Allah . But what you give in Zakah, desiring the countenance of Allah - those are the multipliers.

Riba

• Any excessive compensation without due consideration

• Beneficiary Party sharing no risk• Sure gain without the possibility of loss• Riba creates monopoly in society

A Short Review of the Historical Critique of Usury

• INTRODUCTION:

The concept of “usury” has a long historical life, throughout most of which it has been understood to refer to the practice of charging financial interest in excess of the principle amount of a loan, although in some instances and more especially in more recent times, it has been interpreted as interest above the legal or socially acceptable rate.

Usury in Hinduism and Buddhism

• Among the oldest known references to usury are to be found in ancient Indian religious manuscripts and Jain (1929) provides an excellent summary of these in his work on Indigenous Banking in India. The earliest such record derives from the Vedic texts of Ancient India (2,000-1,400 BC) in which the “usurer” (kusidin) is mentioned several times and interpreted as any lender at interest.

Cont…

• For example, Vasishtha, a well known Hindu law-maker of that time, made a special law which forbade the higher castes of Brahmanas (priests) and Kshatriyas (warriors) from being usurers or lenders at interest.

Vix Pervenit

• Vix Pervenit: On Usury and Other Dishonest Profit was an encyclical, promulgated by Pope Benedict XIV on November 1, 1745, which condemned the practice of charging interest on loans as usury. Because the encyclical was addressed to the Bishops of Italy, it is generally not considered ex cathedra.

• The Holy Office applied the encyclical to the whole of the Roman Catholic Church on July 29, 1836, during the reign of Pope Gregory XVI.

Usury in Ancient Western Political Philosophy

• Among the Ancient Western philosophers who condemned usury can be named Plato, Aristotle, the two Catos, Cicero, Seneca and Plutarch (Birnie, 1958).

• Nevertheless, in practice, ways of evading such legislation were found and by the last period of the Republic, usury was once again rife.

Usury in Judaism• The Hebrew word for interest is neshekh, literally

meaning "a bite" and is believed to refer to the exaction of interest from the point of view of the debtor.

• Despite the prohibition on taking interest, there is considerable evidence to suggest that this rule was not widely observed in biblical times. In addition to several references in the Old Testament to creditors being exacting and implacable in their extraction of interest, from the Elephantine papyri it appears that among the Jews in Egypt in the fifth century B.C.E.

Usury in Christianity

• Despite its Judaic roots, the critique of usury was most ferverently taken up as a cause by the institutions of the Christian Church where the debate prevailed with great intensity for well over a thousand years. The Old Testament decrees were resurrected and a New Testament reference to usury added to fuel the case

RATIONALE FOR THE CRITIQUE OF USURY

• Throughout the history of the criticism of usury, various reasons and rationale have been forwarded in support of this position.

• Unearned Income.• Double Billing.• Exploitation of the needy.• Mechanism of Inequitable of wealth.• An Agent of Economic Instability.• Discounting the future.

Great Recession in the United States

• The United States entered 2008 during a housing market correction and a subprime mortgage crisis

• Unemployment as of March 2014 was 6.7%, considered high by American standards.

• Many factors directly and indirectly caused the Great Recession (which started with the US subprime mortgage crisis), with experts placing different weights upon particular causes.

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Conclusion:

• Despite effects to evade it, The prohibition of interest remain a key element In the Islamic vision of a socially responsible economy & an important element in Islamic business practice.

• From the Islamic perspective, with its bias towards fair distribution of wealth and social justice

Cont…

• The Quran’s stricture against riba remain at the heart of the Muslim individual as well as national financial institution in international economic activity.

• Now I would like to End this presentation with a message in the Holly Quran by ALLAH in which he prohibited interest & permission trade.

• “Buying and selling is but a kind of interest, even though Allah has made buying and selling lawful, and interest unlawful. Hence, he who receives this admonition from his Lord, and then gives up (dealing in interest), may keep his previous gains, and it will be for Allah to judge him. As for those who revert to it, they are the people of the Fire, and in it shall they abide

Allah deprives interest of all blessing, whereas He blesses charity with growth. Allah loves none who is ungrateful and persists in sin.

• Ayat 276

Truly the reward of those who believe and do righteous deeds and establish Prayer and pay Zakah is with their Lord; they have no reason to entertain any fear or grief.

• Ayat 278

But if you fail to do so, then be warned of war from Allah and His Messenger. If you repent even now, you have the right of the return of your capital; neither will you do wrong nor will you be wronged.

• Ayat 279