By Dr Mohammed Nawaz [al Hasani]
Abstract
The basic
difference between the conventional and the Islamic systems of transaction is
riba which is the main source of income in conventional system of transactions but
is prohibited in the Islamic theory of contract and is also declared harmful
for the economy in Islamic law.
As riba is
prohibited, it is declared unlawful in its different forms. This article
analyzes the different types of riba that are relevant, aims at defining each
type of interest [riba]and explaining the difference between these types with
examples.
The article gives a comprehensive and
exclusive definition of interest [riba] but avoids to elaborate it because it
is the topic of another article. It also does not discuss the underlying causes
of riba though some relevant matters are discussed here.
This article
explains the Shariah standard of riba and its parameters. It also answers some
questions related to riba and its definition being not exhaustive.
The article will make it clear that
riba is absolutely prohibited in the Islamic law and nobody is allowed to
suggest that there are two types of riba, one of which is prohibited and the
other is permitted.
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