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I then decided to study the relevant verses of the Quraan myself. The Quraan (also
written as Koran) is the fundamental religious book in Islam. That Allah, and not man, is
the Author of this book in original Arabic, is one of the essential articles of the Islamic
Faith. It is the last of the books claiming divine authorship, and the first such one to be
revealed in this Historical age. Its original text has been preserved unaltered for the last
over fourteen centuries since it was revealed.
An in-depth study extending to over 2 years of the verses, revealed to me that the
Quraan prohibits what it terms, in Arabic, as Ar-Riba. It revealed to me that the divine
Book also duly contains a definition of the term. As per this definition, Ar-Riba is that
increase in ones material wealth or possessions, which one unjustly gets, during any
transaction, by usurping what rightly should belong to others.
The Qur'anic injunction against Ar-Riba is, in other words, divine injunction against all
economic injustices. Alongside this injunction, the Quraan states categorically, and
significantly, that Allah has made business lawful. The two together, I believe, form the
basic Islamic Principle of Economics.
I have recorded my detailed findings in an eBook entitled The Qur'anic Concept Of ArRiba. Suffice it to say here for the purpose of this short article, however, that interest
charged by a good reputed modern-day bank, does not fit into the Qur'anic
definition of Ar-Riba. A substantially major portion of such interest is for compensating
the bank for actual expenses incurred by it. The rest, which is substantially a minor
portion of the interest, constitutes the net profit of the bank.
Such profit is its rightful dues earned in the business of providing purchasing power to
those who need it.
Interest as such is thus not prohibited in Islam. But if interest were taken at unjustly high
rates, it would cross into the territory of Ar-Riba. It would then therefore get prohibited.
Mohammad Shafi J. Aga
http://www.islam-n-interest.com/Interest_And_Islam.html