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  • Difference Between Riba And Bank Interest

    Posted by Mohsin Ulhaque on July 2, 2020 at 9:19 pm

    Assalam O Allaikum

    Any one can differentiate between RIBA and Bank Interest?

    In my opinion both are two different terms.

    Pl advise

    Umer replied 4 years ago 4 Members · 14 Replies
  • 14 Replies
  • Difference Between Riba And Bank Interest

    Umer updated 4 years ago 4 Members · 14 Replies
  • $ohail T@hir

    Moderator July 2, 2020 at 9:42 pm

    Salam – Commerical interest is discussed on this thread, I believe it addresses your question, pls. take a look

    Discussion 1321

  • $ohail T@hir

    Moderator July 2, 2020 at 9:43 pm
  • Mohsin Ulhaque

    Member July 2, 2020 at 9:44 pm

    Thanks

    Let me check

  • $ohail T@hir

    Moderator July 2, 2020 at 9:46 pm
  • $ohail T@hir

    Moderator July 2, 2020 at 9:47 pm
  • Mohsin Ulhaque

    Member July 2, 2020 at 9:51 pm

    Yes I like it

    But my question is most of the peoples thought RIBA and bank interest is same.

    In this video Ghamdi sb explained nicely what is riba, but is this same as bank interest or not?

    • Faisal Haroon

      Moderator July 2, 2020 at 10:02 pm

      I agree, interest and Riba, while interchangeably used terms, do not mean the same thing. Interest is a by product of how the financial system works in the modern societies. All riba is interest, but not all interest is riba.

    • $ohail T@hir

      Moderator July 2, 2020 at 10:28 pm

      Pls. see this link when you get a chance: http://www.khalidzaheer.com/issues-pertaining-to-riba/

    • Mohsin Ulhaque

      Member July 2, 2020 at 10:49 pm

      Thanks Tahir Bhai

  • $ohail T@hir

    Moderator July 2, 2020 at 9:51 pm

    @uq4454819 if you have anything specific to add or another thread that already addresses it….thank you!

  • $ohail T@hir

    Moderator July 2, 2020 at 10:05 pm

    The religious legality of the system of banking which prevails in our societies has recently come under discussion. It is contended that since the bank only receives a portion from the profit of a commercial venture it had financed on the basis of a loan hence the very reason for which interest was regarded as prohibited does not exist in the banking system. This view has been put forth by some scholars of Egypt and Syria. Mawlānā Wahīd al-Dīn Khān (b. 1926 AD), a celebrated scholar and preacher from India too, has corroborated it to some extent in his book Fikr-i Islāmī. In my opinion, this view of the scholars can be considered intellectually convincing; however, it is essential for this that the following remedial measures be introduced in the banking system.

    Firstly, if a commercial venture financed by a bank loan needs to be discontinued for some reason, the demand for profit by the bank should cease that very day. It should only demand the principal amount. As a result, the whole transaction will be of the nature of principal-secured financing which obviously cannot be objected to.

    Secondly, in a loan given for non-commercial purposes except for inflationary adjustments, no interest should be demanded on it.

    If these measures are taken, then the banking system becomes just to a great extent. However, there are two more questions which arise.

    Firstly, what is the ruling on people who do not charge interest but procure an interest-bearing loan to meet their personal and business needs?

    Secondly, should saving schemes through which governments acquire loans for their needs from people and also give them profit be regarded as prohibited?

    The answer to the first question is that no objection can be raised on paying interest because the prohibition of interest is based on the Qur’ānic principle of akl al-amwāl al-bātil (devouring wealth through unfair means), and a person who pays interest does not devour the wealth of some other person through unfair means. In fact, he pays a part of his legitimately earned wealth to the borrower in lieu of the loan he provides. The issue of interest is mentioned at more than one instance in the Qur’ān. Not at one place has the Qur’an condemned those who pay interest. In fact, it calls them oppressed and asked the lender to give them time if they are facing financial constraints. Those who regard paying of interest as prohibited do not base their view on any verse of the Qur’ān or any implicit or explicit deduction from any of its verses. They base their view on a Hadīth narrative which says that the Prophet (sws) has cursed the person who consumes interest and makes others consume it. The words of the narrative are: آكِلَ الرِّبَا وَمُؤْكِلَهُ … لَعَنَ النَّبِيُّ1 In this narrative, the word مُوْكِل is used for a person who makes others consume interest. Linguistically, it can refer to a person who pays interest and also to people who are the agents of professional lenders and in this capacity hunt for potential customers for their masters. If lending on interest becomes a business, then such agents are its essential need; without them, the business of lending interest bearing loans cannot be run. If the narrative relates to such people, then there is no complexity in the narrative because this is blatant co-operation with evil (ta‘āwun ‘ala al-ithm). As agents of interest-lenders, those who prepare agreements and documents for them and act as witnesses, their matter too is no different. The service provided by bank staff of these times is of similar nature. However, people who acquire interest-based loans cannot in any way be regarded as guilty of co-operation with evil (ta‘āwun ‘ala al-ithm). This expression can only be used for an act done by perpetrators of a sin and for those who reap the benefits of this sin. Those who acquire interest-based loans do not acquire it to help the devourers of interest, they obtain loans for their personal and business needs. If this is co-operation, then it is not more than the co-operation done by our scholars and righteous individuals when they deposit their own wealth and that of their institutions in banks. If interest is prohibited at the state level and all forms of interest transactions are brought to an end, then such people who still pay interest can be regarded as criminals who have breached a law. If the Hadīth narrative cited above refers to them, then the directive should relate to the scenario just stated – when interest transactions had been prohibited in the time of the Prophet (sws).

    The answer to the second is that the referred to saving schemes are not like general interest transactions. The reason for this is that through these schemes, a government borrows money from the lenders not on their conditions but on its own conditions. Not only this, it ascertains the rate of profit itself as well and also keeps increasing or decreasing it on its own discretion. Although this is not exactly the same as returning a loan taken from someone with some addition to the principal amount without the lender demanding this addition, yet this arrangement is something close to it. It is known that interest has been forbidden because it can result in oppression and exploitation. However the intensity of this oppression and exploitation is greatly reduced in this arrangement. For the pious, it is befitting that they do not benefit from such schemes. However, if the general masses especially the orphans, widows and retired personnel who are apprehensive in investing their wealth in business ventures benefit from these schemes for their essential expenses, it is hoped that they will not be held accountable for this by their God.

    (Tr. by:Dr. Shehzad Saleem)

  • Mohsin Ulhaque

    Member July 2, 2020 at 10:43 pm

    Thanks for the info

    Now I wants to share my opinion about RIBA. In Quran Surah Baqra Ayat 276

    This Ayat is check from GOD, and easy for human being to differentiate between RIBA and others, like banking or financing etc.

    Ayat said, RIBA decreases your (wealth) and Sadaqat increases it.

    Now you can use this check of Quran anywhere in this dunyas system.

    If conventional banking or any of its product is decreasing your business or living, then its RIBA or vise versa.

    Allah Knows Better

  • Mohsin Ulhaque

    Member July 2, 2020 at 10:46 pm

    In my Opinion both Conventional Banking and Islamic banking are SAME.

    One made by Bankers and other created by Maulvis. You can choose either beneficial to you.

  • Umer

    Moderator July 2, 2020 at 11:33 pm

    IMHO The Qur’ānic principle of akl al-amwāl al-bātil (devouring wealth through unfair means) is the principle behind any transaction’s prohibition. Whether we call it Riba or interest or any other name that comes along as we progress through time, its the nature of transaction which decides its hurmat and not its commercial name.

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