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THE PROHIBITION OF RIBA/RIBIT

It would be useful to present here a recap of the Judeo-Christian-Islamic Shari'aa law discussed earlier in the book and to introduce the reader to what can be considered the main contribution of the research that this book presents.

There are two types or classes of riba:

1. Riba al-nassee'ah is defined as the time-related increase over the original value of capital given, usually by putting a condition in the loan agreement indicating that the lender would be entitled to an increase over the original value if the borrower asks for an extension of the term of the credit. This type of riba is prohibited by the Qur'aan, the Sunnah (tradition of Prophet Muhammad [pp]), and all scholars, without exception.

2. Riba al-fadl is defined as selling (real) money for (real) money, commodity for commodity (e.g., food for same kind food) with an increase over the original value except under special rules, as will be explained later. This practice is also prohibited by all sources (the Qur'aan, the Sunnah, and all the scholars), because it can lead to riba al-nassee'aah, which was described above. It is given the label of riba as a way to attach it to the real reason for prohibiting it: because it leads to riba al-nassee'ah. Prophet Muhammad (pp) said[1]:

.. . do not sell the [silver] dirham (a prevailing currency then) for two [silver] dirhams because I am afraid that you indulge in [the prohibited] Riba.

The Hadeeth (sayings or pronouncements) of Prophet Muhammad (pp) specifically prohibited practicing riba in six items: gold, silver, wheat, barley, dates, and salt. It was reported that the Prophet (pp) said[2]:

.. . gold for gold, silver for silver, barley for barley and salt for salt hand to hand [in an on-the-spot transaction without delay to avoid participating of these into options and futures speculative activities because these are used as reference calibrating pricing and valuation tools] those who increase in buying or selling these items or not delivering it at a future date and not immediately [hand-to-hand] they are considered practicing riba. This applies to those who take the increased amount and those who agree to give it.

In another narration by Muslim (one of the compilers of the sayings of Prophet Muhammad [pp]), it was added:

. . . should the kinds [of commodities] differ, then exchange as you wish, provided that the exchange is hand to hand [on- the-spot].

  • [1] Narrated by Abu Sa'eed A1 Khidry.
  • [2] Ibid. Also reported and authenticated by Imam Ahmad and Imam Bukhary.
 
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