teggy

Salam Alaikum everybody,

The title is pretty explanatory of the content, and subject. I'm sure we're all aware of our surroundings, daily dealings, and minor/major commerce in today's economy is in part or wholly based on Interest/Riba. Whether or not you indulge in it directly may be one thing, but who you do business with, or the avenues you adopt to conduct transactions maybe riddled with Riba/Interest.

So the question that I have been meaning to ask of you all is, and Muslims in specific, how do you guard yourself against Riba? And IF you do indulge in Riba (I swear, I do not mean to judge or pass judgement), then how do you justify it? What do you hope to do in forseeable future to rid yourselves of Riba because at one point or another, most of us have or currently do taste Riba frequently.

The reason I ask this, as always is to learn from your perspectives.

JazakAllah Khair in advance.

SindSagar

Wa Alaikum Assalam Teggy!

Hot potatoe Topic! ain't no one wants to touch this!

I am not an expert, but there is mention of quantities like interest that is double or four times the capital sum is haram...............in the Holy Quran!

But most scholars agree that any sum if it is interest is haram! and it is hard to protect against that ruling.

but keeping away from double and four times is usually easy!

teggy

Thank you sir. Yes, it is a rather sensitive topic. But it's so real though. Sometimes almost scary because it's a nightmare some of us are happily living, and do not mind if it continues.

Maybe we're right to enjoy it (I'm no one to judge), but if we know it is wrong, then what do we do to safeguard our faith, and its' core principles regarding this disease and its' potential spread in every aspect of our lives?

That is the question, and I am hopeful we will have some insightful suggestions/comments/answers to it by some friends who have a thought on this topic. God Willing.

SindSagar

One of the main fallouts from the 9/11 disaster, was the fact that US Govt and others dropped the Prime Interest rate to almost Zero%.........

So who knows what will happen in the future............but as the present conditions are all over the World, the only way out is to drop the interest rates to a minimum!

USResident

Can someone first define what Interest is before this discussion moves on? Interest in the light of Quran and hadith. And then in the light of trade and commodities and finally the difference in money centuries ago and today. Without an understanding on these fundamentals its pretty fruitless to discuss riba or interest in todays system. The system of today is not as cut and dry as it used to be centuries ago.

USResident

So how can we discuss when no one even understands the substance of Riba. Well since no one came forward I'll throw something out to begin with.

Question for the thread opener. When you say how can we avoid interest do you mean how we can chose Islamic alternatives in the society we live in or avoid it all together?

dormant

Any form 'Time value of money' is Riba.
Any financial transaction/contract where the quantity of the comodity used strictly as a medium of exchange/store of value , is supposed to change not as a result of a natural process of depletion or growth but at an artificially defined rate, the 'flux' in the commodity's quantity is a form of Riba. - Anyhow this is one definition I learnt from a scholar ,

I believe you should do more research on this subject to clarify any doubts in your mind.

COLD_FIRE

^ Well, research will not help. Some of us already know where we stand. We just like to poke and see the alternatives.

To the question at hand... it like crossing a jungle, and crossing it without a scratch. Sounds unbelievable, but that's what this modern world of economics and statistics, banking and finance and credit and loans e.t.c demand of us. We are truly living in a jungle of pointy sleek and big edgy thorns. They just have different names.

Lets say...
Using a credit card, but paying monthlies on time.
Never open a fix deposit account in any bank, ever. Current accounts have no interest.
Avoid taking loan, as much as possible.
Never take money on top of the loan u have given to some one, even after a considerable amount of time.
Never buy a property on mortgage schemes/mortgage loan/commercial or pvt mortgage e.t.c. (This also means living on a rent... probably for the rest of our lives)

The above are some channels that i've tried to take into account. For myself and my family.

USResident

I have done some research and would like discuss different aspects of Riba. Not that things are not clear in my head but have a healthy discussion, for we learn a lot from such academic discussions.

Mt first and foremost understanding is that Riba was forbidden to preserve injustice among trades or transactions and to preserve market competition. So the economic substance is important as compared to the contract language.

Time based value of money is but one aspect of Riba, which depends on the difference between commodity money and fiat money of today. Though in principle both are used for similar reasons today.

teggy

The Islamic alternatives could very well be an answer. That's what I'm seeking; to learn what the alternatives are. As br. Cold_Fire pointed out the things he does to avoid indulgence in Riba as much as possible.

As for your previous question, I personally believe Riba is Riba. Significance of time (Ancient vs. Today) does not matter, because we have been foretold of a time when it would be unavoidable for us to abstain from being involved in Riba (as stated in a hadith).

But, I suppose the goal of this thread, and core of my question is What can we do to ensure that it is minimal, if even that.

I hope that clears any confusion..

USResident

The Islamic alternatives are no better than the conventional methods in that they focus on contractual language from classicalk contracts yet they do not preserve the benefit that the prevention of Riba is supposed to accomplish, which is why I had mentioned that the economic substance related to Riba is of utmost importance in understanding and creating a legit Islamic finance system.

Can you please quote the hadith?

In todays world, the decision is entirely personal to avoid Riba. Simply don't do it. As for creating an Islamic system of finance, we have fallen short because they do not really provide any benefit as compared to a conventional system of banking today. Islamic finance must evolve from Islamic jurisprudence which should pick the better of two benefits and the lesser of two evils. Arbitrage in contractual language of Islamic finances has not yet changed the economic injustice they do to muslims, which is the primary purpose of forbidding Riba.

teggy

Here is the hadith:

Hazrat Abu Hurairah r.a. reported that the Prophet (s.a.w.) said : A time will certainly come over the people when none will remain who will not devour usury. If he does not devour it, its vapour will overtake him. [Ahmed,Abu Dawood,Nisai,Ibn Majah]

http://muttaqun.com/riba.html

muslimpak

[FONT=Tahoma]السلام عليكم ورحمة الله وبركاته[/FONT]
Assalam-o-alykum wrb



If someone do effort, Allah help me. If we try to protect ourself from Riba, Allah would help us.



Now there are many financial scheme working without Riba. Muslim around the world struggling hard to bring the Riba-free system. Western economic system failed to solve the problems of humanity. InshAllah Islamic financial system, free from Riba would replace it.




[FONT=Tahoma]جزاك اللهُ خيراً‎[/FONT]
Jazakallahu Khayran

Cheegum

Ask yourself if you are brave enough to face the lifestyle changes that will follow when you kick riba out of your life. Remember, this world is a prison for the believer and paradise for the non believer.

suhaib

you cant because money today is in paper, which is a big part of riba, so if you want to stay away from riba you need to save in gold and silver coins and bars and not use paper money or electonic money etc. creadit cards.

USResident

JAK.

USResident

One issue is that the world of interst today is so wide that you can probably find only a select few things to pick on in relation to what is mentioned in our classical literature. Secondly, Riba has been clearly defined in some cases when it comes to trade or exchange of things however from the perspective of sale at least I have not come across any convincing or at least material which gives me a convincing explanation of Riba.

For instance, someone said time based value of money is Riba. According to all classical jurisprudence and literature, this is not true. Time does have a portion of the price, this is the very basis of a Muraba transaction where the cash price is increased to a much higher value (almost all Islamic financial institutions do this based on how conventional banks calcualate interest rates in a mortgage) for deferred payment. What I cannot seem to dsitinguish despite reading up Mufti Taqi Usmani, Mahmoud A El-Gamal and other literature I have found on this is that what makes it Islamic when conpared to a fixed rate mortgage. Conceptually they are the same. All material I have researched, they just go one to say that Muraba is halal whereas the conventional mortage is interest based assuming as if one is going to refinance it. If I do not refinance it, to me it ends up being absolutely no different than the Islamic alternative being offered.

Can someone please elaborate on the fine point I am missing?

psyah

Peace USResident

We've had discussions in the past regarding interest so I would like to reiterate my stance on it. Firstly, that it is haram. Any fatwa given for it is specific to the person who does it.

There are two issues at hand the giving of riba and the taking of riba.

Both of which are haram, the giving of it i.e. in mortgage is usually due to hardships in lifestyle for other alternatives. I may arguably reluctantly go in to a mortgage one day, believing it to be a sin and for it shall seek much forgiveness, but I will never call it an acceptable thing and will never advocate it, unless the lender is doing so on 0% interest.

Traditionally houses like consumables are considered to devalue in time, i.e. they require maintenance, whereas food rots and goes bad, etc.

However, due to inflation which is a modern phenomena the prices invariably increase (in a "healthy economy". It could well be that interest based finance systems act as catalysts to this increase as well.

All the Arabic names given to the Islamic finance mortgage alternatives are really not Islamic at all. They are pre-Islamic methods of loan for profit.

Islamic mortgage will undoubtedly be non-profit and completely charitable in nature. So a loan is given on the basis of Karz-e-hasana. To which a return is given in due course and in the end the debtee may choose out of etiquette to add a gift for the help given.

In the so-called Islamic mortgages there is also no way a poor family can undertake it. Since the amount required for deposit is so high that only richer people can do it. Infact, high street bank mortgages are far more easier to come by in this regard.

Both systems are extortionistic and this is also not allowed in Islam ... i.e. to create a false value purely because people need homes. To play on the needs of people is unIslamic. The overheads asked for regarding Islamic mortgages are so high that they equal and in some cases exceed the repayments of standard mortgages. Lastly, the deeds of the house are not divulged to the buyers until they make full payment ... this is considered as the deposit ... so really it is a clever game that has been developed, the sort of games that the Jews played with the fish on Saturdays - you know the story.

However, all this said if there is a need, explain this to a local mufti get ijaza and do what you need to do and seek forgiveness always and try to make it your first and last situation. That is what I advise.

USResident

Yes I know there have been discussions about this topic many a time in the past. I would be in line next to you when it comes to saying that Riba is explicitly haram in Islam.

I myself researched both conventional and Islamic alternatives available to me before I had taken a home mortgage a couple of years ago and I indulged in a conventional loan knowingly that it is a sin and I always ask forgiveness for it but my circumstances warranted the need for a house for I have parents and family under my responsibility to house, not an easy task in USA. I do not advocate interest based banking either but needs differ from person to person based on circumstances.

It appears that your concern about Islamic alternatives is the same as what I had concluded back then and still now, they are vicious and devoid of the charitable purpose of a loan in Islam. As I mentioned earlier in one of my posts, they do not provide social justice in transaction, which is part and parcel of the reasons for forbidding Riba to establish justice and equality in trade and transaction not exploit.

Yet it remains that all early jurists have allowed a portion of the price for time deferrment of payment. The question remains and there is not concensus from what I have researched thus far, when does this markup become exploitive enough to deviate from the very evil it is supposed to save us from.