Types of Riba
Riba is an Arabic word which mean Interest. There are two main type of riba or interest. Most predominant is the interest or other increase on a loan of cash, which is known as riba an-nasiya. Most Islamic jurists hold there is another type of riba, which is the simultaneous exchange of unequal quantities or qualities of a given commodity. This is known riba al-fadl.
Riba al-Nasiyah is defined by many Muslim scholars. It is also known as Riba al-Quran and riba al-Jahiliya.
Riba is an Arabic word. Riba means "an addition to" or "excess" over the original price of the good or service. In broader meaning we can say that; the excessive price is paid on any transaction or loan over the original price is called Riba or where the payment of an additional amount on the principal is made conditional to the advance of such a loan is called riba.
According to Muslim Scholar Imam Abu Bakar Hassan
"Riba or Interest is a loan where specified repayment duration and an amount in excess of actual capital is predetermined."
According to Abu Ishaq
"Every loan that draws more than its actual amount is called Riba."
Sahabi Fazala Bin Obaid says about Riba:
"Every loan that draws profit is one of the forms of Riba"
2- Riba al-Fadl:
The second type of Riba or Interest is called Riba Al-Fadl, it is also known as Riba Al-Hadith.
Riba Al-Fadl means and includes the excess income or amount received when two alike commodities are exchanged.
In other words, we can say that, “The riba of exchange surplus. commodity for commodity exchange transaction.”
“It is acts like a Barter System, the exchange of Commodities”
Riba according to Quran
Riba is lawful or not you can read these Quan Verses and Ahadith.
In Surah Al-Nisa’, verse 161
“And for their taking interest even though it was forbidden for them, and their wrongful appropriation of other peoples’ property. We have prepared a grievous punishment for those among them who reject faith.
In Surah al-Rum, verse 39
“That which you give as interest to increase the peoples’ wealth increases not with Allah; but that which you give in charity, seeking the goodwill of Allah, multiples manifold.”
Riba according to Ahadith
From Jabir: (Tirmidhi)
The Holly Prophet Muhammad P.B.U.H annoyed the receiver and the payer of interest, the one who records it and the two witnesses to the transaction and said: They are all alike [in guilt].
From Abu Hurayrah: (Ibn Majah)
The Holly Prophet Muhammad P.B.U.H said: ‘Riba has seventy segments, the least serious being equivalent to a man committing adultery with his own mother.
Riba: Jewish and Christian Prohibitions
Riba or Interest is also not lawful or legal in Christianity and Jewish religions.
The most common form of riba these days is interest, whether that paid on bank accounts or loans. As we know, Interest is strictly Hamram or banned in Islam and any activity in this regard is regarded as sin.
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