Predominating Concept of Interest ( Riba ) in Islamic Perspective: A Critical Analysis.
In Qur’an the term riba is used for involvement which is purely prohibited by this entirely book.A Muslim minds usually claim that “riba is that pre-decided surplus sum which creditor receives from the debitor on his/her chief sum on adulthood of loan.A It is a good recognized definition of the term riba, but this definition restricts the construct of riba to debt minutess merely, whereas the rent of all other assets except hard currency is considered as valid.A It means that, wages of hard currency ( one signifier of plus ) is improper and rent of all other assets is legitimate.A Muslim minds provide some justifications for this particular intervention to hard currency. Harmonizing to so if an point is depreciated with the transition of clip so its rent becomes lawful. Furthermore if during the dealing ownership of the plus will non alter, nature of rented point will stay same so their rent is justified. In add-on they said that, presence of component of hazard and construct of badal ( exchange ) , provide a legal base to lease. But the critical analysis of all of those grounds shows that none of them have any logical and spiritual base and the same state of affairs is with this definition of involvement, which can measure up any criterion of logical thinking.
Riba ( involvement ) is an of import Qur’anic term from economic point of position. A immense literature is available on the reading of this term. Alternatively of that, it is an unfastened fact that, still a batch of confusion exist about the nature & A ; significance of this term. Different bookmans have different point of positions in this respect. But it may be said that there is a construct on which about a consensus has been build up, and this construct is widely accepted and recognized. Harmonizing to this construct riba is that extra sum of money which a creditor receives from the debitor on salvation of his / her loan and this extra sum should be the portion of understanding. A outstanding Muslim bookman has defined it in these words riba is the loan given for a specified period on status that, on termination of the period the borrower will pay it with some extra sum. All Jasses Abu Baker ( 1935 ) p. 470. It means that riba is possible merely in debt minutess with that this add-on should be portion of understanding and received on salvation of loan, S. Abul A ‘ La Maududi ( 1997 ) p. 20. It does n’t count how little or big this extra sum may be and what is the intent of loan and where this dealing has taken topographic point PLD ( 1992 ) p.1.
Harmonizing to this school of idea merely extra sum on any debt dealing is termed as riba, whereas the wages of all other assets like houses, machines, offices and stores etc. , is considered as lawful in the signifier of rent, M.N.. Siddiqui ( 1968 ) pp.126-130. This state of affairs gives a particular position to hard currency and bifurcates it from other assets, because harmonizing to this concept rent of hard currency ( which is one signifier of plus ) is considered as improper and rent of remainder of the assets is assumed to be lawful. This state of affairs surely raises inquiries about this particular intervention. The protagonists of this construct produce five grounds, for its justification. These statements are as follows:
It is said that, depreciation is the chief cause of rent. It is claimed that, due to depreciation rent of all assets, becomes lawful. All those points which lose their value due to utilize can be given on rent, whereas the consumable things can non be given on rent, M.N. Siddiqui ( 1968 ) p.p. 178-181.
2.2Changes in Ownership
It is assumed that rent of all those points is lawful whose ownership is non changed during dealing, e.g. ownership of all assets like houses, machines and offices etc. , is non changed during the dealing hence these assets can be given on rent. Whereas in instance of hard currency when it is given to others as loan so its ownership is changed therefore its rent can non be justified A.R. Killani ( 1991 ) p. 96.
2.3 Changes in Nature
Third statements in this respect is that, rent of all those points is lawful which kept integral their nature during period of rent, e.g. machines, houses and offices, etc. , remains in the same status before and after allowing, hence their rent is lawful. On the other manus if the state of affairs is rearward so the rent of such points is prohibited, M. Taqi Usmani ( 1999 ) p.47.
2.4 Concept of Badal ( Exchange )
A large statement in the favor of rent is badal. Under this construct it is agreed that since in instance of allowing any plus e.g. machines, houses, edifice, etc, the individual who let these points receives rent in the signifier of hard currency and in exchange the individual who hired these points get the impermanent ownership of these things. In this manner they exchange the points or there is badal in the dealing. On the other custodies in instance of debt there is non any badal creditor pays a certain sum to debitor in the signifier of debt and did non have anything in exchange, it means badal ( exchange ) is non completed hence this dealing is improper.
2.5 Presence of Hazard
Propriety in this context is presence of hazard. Since the proprietor of plus bare ‘s the hazard of harm and devastation of his/her plus, hence he/ she deserver ‘s the wages of it which is rent. Furthermore, in position of Islamic jurisprudence net income is capable to hazard, M. Taqi Usmani ( 1999 ) P. 47.
3Critical Analysis of Predominating Concept of Riba.
Whereas this predominating construct of riba is concerned, neither it has any logical base nor it fulfill any criterion of concluding. The basic ground of groundless is that unreal bifurcation by which hard currency is separated from other assets. No solid ground can be given for this nonmeaningful division. In all topics e.g. economic sciences, accounting and commercialism hard currency is considered as mandatory portion of assets. The most reliable ground is that Qur’an does non accept this nonmeaningful bifurcation. The simple cogent evidence is that, Qur’an has used the term mal for all assets including hard currency. Qur’an has used this term at about 86 topographic points in the sense of assets including hard currency. Some illustrations from this entirely book is as follow:
- Chapter 2 poetry 171: for all those points which are liked by human being.
- Chapter 10 poetry 88: for each and every plus including luxuries.
- Chapter 26 poetry 88: for all those points which are good for world.
- Chapter 104 poetry 2: for the points which are denumerable and collectible.
- Chapter 90 poetry 6: for the things which have a opportunity of wastage and devastation.
- Chapter 27 poetry 36, and chapter 17 poetry: for the points which can supply aid of any sort.
- Chapter 68 poetry 14: for the points used for fondness.
- Chapter 18 poetry 34 & A ; 39: in the sense of farms & A ; gardens.
- Chapter 4 poetries 10 & A ; 161: in the significance of general assets.
Furthermore, in the same sense it is used in chapter 19 poetry 77, chapter 74 poetry 13, chapter 111, verse 2 and chapter 2, verse 155.
Not merely in these poetries but in this context many mentions of other poetries can besides be presented where this term is used in Qur’an for assets including hard currency. However, at any topographic point Qur’an is non ready to pull any boundary line between hard currency and other assets, and gives them same intervention. The same state of affairs is with Hadith, any individual Hadith can non be presented in which this unreal bifurcation is recognized. This is the simple cogent evidence that basic premise of prevailing and traditional idea is wholly incorrect, and do non hold any logical base. Furthermore, all grounds which are presented in justification of this unreal bifurcation are unable to formalize this construct. The critical analysis of all these grounds is as follows.
3.1 Depreciation: First Base of Rent
Whereas this most of import statement is concerned its rebuttle is as follow.
3.1.1In this context foremost and the most of import concern it that, this statement can non be proved from any poetry of Qur’an or Hadith. In the other words depreciation as the base of rent can be justified neither from Qur’an nor from Hadith. Without any justification how it can be said that it is the base of rent? This state of affairs is non with merely depreciation but with all other statements which are presented in this respect.
3.1.2The ground that, due to depreciation rent becomes lawful is wholly died when it is observed that paper money or currency is besides depreciated. It is an unfastened fact and no 1 can deny it. Since it is argued that on the footing of depreciation rent becomes lawful so on this footing rent of currency i.e. riba should besides be recognized. Hence it can be said that, this construct or claim is self- contradictory.
3.1.3In the 2nd chapter poetry 27 ( 2:27 ) Qur’an has allowed trade and prohibited riba. For any trade dealing presence of a purchaser, a marketer and a trade good is must which is exchanged between purchaser & A ; marketer. But in instance of rent none of this status is being fulfilled, on the other manus it has an extraordinary resemblance with riba. Hence, on this footing it can non be acceptable.
3.1.4Another expostulation on this construct is that, any right method of computation of depreciation is non yet discovered. Throughout the universe its computation is based on appraisal. Simple inquiry is that, when exact computation of depreciation is non possible so how rent can be charged on it?
3.1.5It is an unfastened fact that with transition of clip assets are depreciated and the sum of depreciation continuously diminution. On this footing sum of rent should besides be declined because harmonizing to this approach footing of rent is depreciation, but it is our common observation that, rent additions with transition of clip which is rather opposite to this construct. Hence it can be concluded that rent is non charged on the footing of depreciation.
3.1.6According to the theory, rent is charged due to depreciation, and so on this footing charged rent should be in the proportion of depreciation. But in existent life it is non so, rent is ever charged on market and ne’er on the footing of depreciation. This unfastened contradiction invalids the whole construct.
3.1.7Another struggle between theory and pattern is that, proprietor of the edifice receive separate sum of rent different parts of the edifice depending upon many factors.A Whereas the whole edifice is depreciated at the same rate.A Hence from theoretical point of position rent of each portion of the edifice should be same because all parts are deprecating at the some rate.A It means that rent is ne’er charged on depreciation, and no rapprochement is possible between theory & A ; pattern, Farooq Aziz ( 2007 ) p.72.
3.2 Changesin Ownership: Second Proof of Rent
Merely like first statement, this ground is besides based on psychotic belief. Under this point it is said that, in instance of rent ownership is non changed in instance of allowing an plus whereas is instance of debt it is changed. The existent fact is, it is non so, in both instances state of affairs is rather same both creditor and proprietor of plus temporarily lose the ownership of their assets and Oklahoman or latter it will return to the proprietor. Hence there is no difference between these two minutess.
3.3 Change in Nature: A Third Justification of Rent
It is merely a groundless ground, because if it is accepted so on this footing bank involvement will automatically go lawful which is considered as improper under predominating construct. The ground is that, clients of the bank deposits money in the bank and bank returned them their chief sum and involvement in the same signifier. During this whole dealing nature of point ( currency ) is non changed. Hence on this footing bank involvement should be considered as lawful. Farooq Aziz ( 2004 ) pp 131 – 132.
3.4 Concept of Badal ( Exchange ) : Fourth ground of rent.
Like the other statements it is besides depends on false belief. Actual fact is that, in instance of allowing badal does non took topographic point in its original sense because when any plus e.g. machine, house, or edifice is allowing out by the proprietor, he / she receives the sum of rent and his right of ownership remains integral. Whereas the individual who takes it on rent merely acquire a impermanent right of usage, and did non acquire the right of ownership. In existent sense of badal ( exchange ) right of ownership should be transferred which is non taken topographic point hence this dealing is non measure uping the existent sense of badal ( exchange ) . On the other manus in instance of debt, it is claimed in this instance no badal ( exchange ) is taken topographic point, because when creditor pays his hard currency to a debitor, he / she does n’t acquire anything against it, therefore this dealing is improper. It is once more a misconception that creditor gives loan to a debitor he / she at the some clip creates which is an plus. It means that creditor has exchanged the signifier of his / her plus i.e. from hard currency to Account Receivable and debitor got observing. Hence the basic claim is non right.
3.4 The Factor of Hazard: A Fifth Argument of Rent.
It is said that due to component of hazard rent becomes lawful, it is non true, because Qur’an has purely prohibited gaming. Hence factor of hazard can non warrant rent in any instance.
On the footing of above treatment it can be concluded that predominating construct of riba is rather groundless and does n’t hold any logical base. The basic statement under which it is said that rent of hard currency is improper and rent of other non-perishable assets is lawful do n’t recognized by Qur’an and all grounds which are given in this respect do n’t carry through any criterion of logical thinking.