1/17 🧵
What is Riba?
Almir Colan interviewed by Eva Maleken
👇
What is Riba?
Almir Colan interviewed by Eva Maleken
👇
2/17
Q: Riba is a very common and 'mundane' sin now but carries major consequences in both this life and the Hereafter. Despite this, it is undoubtedly enticing for young people who want to make strides in their dunya goals (buying a house, etc.) to engage in. Why is riba so bad?
Q: Riba is a very common and 'mundane' sin now but carries major consequences in both this life and the Hereafter. Despite this, it is undoubtedly enticing for young people who want to make strides in their dunya goals (buying a house, etc.) to engage in. Why is riba so bad?
3/17
What's the actual issue with it?
And why do you think it has slowly become normalised in our community?
A: I will preface this by reminding us that earning money and establishing yourself is something that should be encouraged within Islam.
What's the actual issue with it?
And why do you think it has slowly become normalised in our community?
A: I will preface this by reminding us that earning money and establishing yourself is something that should be encouraged within Islam.
4/17
However, as with everything, Islam prescribes us with guidelines on how we should engage with money. These guidelines are important as they safeguard us from potential exploitation as well as falling into the traps of consumerism.
However, as with everything, Islam prescribes us with guidelines on how we should engage with money. These guidelines are important as they safeguard us from potential exploitation as well as falling into the traps of consumerism.
5/17
The fundamental issue with riba, which is commonly translated to interest or usury, is that it completely transforms the concept of a true economy. Money is supposed to be a medium of exchange, and a standard of value for other things, which allows us to engage in commerce.
The fundamental issue with riba, which is commonly translated to interest or usury, is that it completely transforms the concept of a true economy. Money is supposed to be a medium of exchange, and a standard of value for other things, which allows us to engage in commerce.
6/17
For example, when you go to a market, that market provides a source of ease for that particular community, whereby one can buy and sell products or services that in turn results in the betterment of that society.
For example, when you go to a market, that market provides a source of ease for that particular community, whereby one can buy and sell products or services that in turn results in the betterment of that society.
7/17
As Imam Ghazali puts it, "Money is the judge of other commodities". It has a verse specific function in Islam: to help us buy and set and set the value of other things.
As Imam Ghazali puts it, "Money is the judge of other commodities". It has a verse specific function in Islam: to help us buy and set and set the value of other things.
8/17
What riba does is completely violate this system by driving capital ownership away from real economic activity such as commerce, agriculture and manufacturing which creates food, shelter and other everyday essentials.
What riba does is completely violate this system by driving capital ownership away from real economic activity such as commerce, agriculture and manufacturing which creates food, shelter and other everyday essentials.
9/17
This is the actual issue; riba turns money into just another commodity and is therefore sold for profit like other commodities.
This is the actual issue; riba turns money into just another commodity and is therefore sold for profit like other commodities.
10/17
Islam rejects this and emphasis that money should facilitate the real buying and selling and should not be a commodity that is sold by itself and should not give birth to more money in and of itself.
Islam rejects this and emphasis that money should facilitate the real buying and selling and should not be a commodity that is sold by itself and should not give birth to more money in and of itself.
11/17
If you want to make money, you need to do something useful by providing a product or service - riba is simply moving money around to allow for money to give birth to more money, which creates a fake financial economy...
If you want to make money, you need to do something useful by providing a product or service - riba is simply moving money around to allow for money to give birth to more money, which creates a fake financial economy...
12/17
...and goes against mutual cooperation, generosity and the spirit of partnership in society.
...and goes against mutual cooperation, generosity and the spirit of partnership in society.
13/17
This is why Islam also differentiates between commerce and giving someone a loan, whereby the latter is supposed to be an act of charity; this is to ensure we do not commercialise people's suffering or situation of need.
This is why Islam also differentiates between commerce and giving someone a loan, whereby the latter is supposed to be an act of charity; this is to ensure we do not commercialise people's suffering or situation of need.
14/17
However, a system of riba provides incentives that create opportunities for people to exploit this suffering or time of need.
However, a system of riba provides incentives that create opportunities for people to exploit this suffering or time of need.
15/17
For example, traditionally a loan is supposed to be for when you endure a certain hardship or require extra financial assistance to fulfil a necessity; a system of riba creates a consumer- and desire-driven society whereby you begin seeking loans for basically everything.
For example, traditionally a loan is supposed to be for when you endure a certain hardship or require extra financial assistance to fulfil a necessity; a system of riba creates a consumer- and desire-driven society whereby you begin seeking loans for basically everything.
16/17
This is the current reality consumerism is almost like a human right - we need massive plasma TVs and this and that. We have a desire-driven economy because riba and loans are feeding into this.
This is the current reality consumerism is almost like a human right - we need massive plasma TVs and this and that. We have a desire-driven economy because riba and loans are feeding into this.
17/17
This is why Islam puts a strict preventative measure against riba and closes the doors to the potential exploitation of people through ensuring people engage in beneficial services that make lawful money.
This is why Islam puts a strict preventative measure against riba and closes the doors to the potential exploitation of people through ensuring people engage in beneficial services that make lawful money.
📚To learn more and deepen your knowledge, join me for the next Islamic Finance Professional Development (IFPD) course.
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