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EBB 10303|ISLAMIC ECONOMICS
“THE PROHIBITION OF RIBA IN THE MUSLIM COUNTRIES”
STUDENT NAME ID NUMBER
NORDIYANA BINTI SHOKIF 62211215051
NUR HANIM BINTI MAHADZIR 62211114553
MUHAMMAD HANIF BIN SAHUL HAMID 62211114615
WAN MUHAMMAD FARED BIN WAN AIZHAM 62214215248
SHAIK ISMETH BAQIR BIN SHAIK BADUSHA 62211114532
INTRODUCTION
Riba -Arabic word:Raba -Bring several of meanings i. expand (Al-Nuwuw) ii.increase (Al-Irtifa)iii.grow ( Al-uluw) iv.excess (Al-Ziyadah)-Literally: additional value -Sharia: - premium - paid by the borrower to the lender along
3
TYPES OF RIBA
Riba Al Fadl• *exchange surplus(barter)
Riba Nasiah• *arises in loan transactions (on the basis of
future repayment of more than the principal) as well as sale transactions (on the basis of deferred price).
HARAMi) Already mention in the Quran-Holy Qur’an in verse 2:275
با م الر ه البيع وحر وأحل الل �“Allah has permitted trade and has
forbidden riba”.•ii) Become a burden to any individual who are involve in this prohibited element•iii) Increased the amount of debt•Iv) Suffer depression
PROBLEM STATEMENT
Greed & Selfishnessi. Gap between the rich & the poorii. Encourage monopolyiii. Gives harm to peopleiv. Wealthy people must pay zakat and giving
charity
Effect Economy Growth•Inflation•Bankruptcy•According to al-Qaradawi: “The strict prohibition of interest in Islam is a result of its deep concern for the moral, social and economic welfare of mankind”•Limited needs & wants
OBJECTIVE OF STUDY
To examine the prohibition of riba in Muslim countries
To propose Muslim countries which are free from riba
To investigate the effect to the economic because of element Riba
PROHIBITION OF RIBA IN AL-QURAN
05/03/23
• Compare riba with Zakat• Praising Zakat, but not Riba
• Attaching the practice of Riba with the Jews• Consider the practice as an injustice
• Prohibition the practice of charging double & multiple riba
• Conclusively prohibiting all forms of riba• Any excess over the capital is disallowed
RIBA IN THE SUNNAH
05/03/23
“From Jabir b. Abdullah said: The Prophet
cursed the receiver and the payer of riba’,
the one who records it and the two
witnesses to the transaction: they are a like
in guilt”
MISCONCEPTION OF RIBA
1. Modern day interest is not riba
Argument: Interest is based on the premise “money is a
commodity”
2. There is no differences between interest and profit
Argument: Bank interest resembles profit in
Murabaha
3. Riba is allowed under Dharura (Necessity)
Argument: Under Dharura, the haram is permissible.
REASON FOR PROHIBITION OF RIBA
Riba will corrupt the society• Happens due to people who has right & power
Riba cause injustice and exploitation• Problems due to the greed & selfishness parties
Ultimate effect to the negative growth of economic
Clear burden on the borrower
• Cause negative effect on production & inflation• Eg: Greece
• Obliged to repay the principle and interest charge
ALTERNATIVE SOLUTION OF RIBA
Giving/Organizing a Qard al-Hassan loan.
Developing an Islamic Banking in the country
Apply the Islamic Economic System
CONCLUSION
Impact of riba
increase the rate crime
Increase gap
between rich and
poor
Economic inflation
• Totally prohibited by Allah because Riba’ will give harms to the people
large• Implemented many banks that inline
with shariah compliance which is Islamic bank.
• Change the Bay Inah contract to Tawarruq contract
• We should strongly avoided and rejected it from practicing on our daily
lives.