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ISLAMIC FINANCE –PROHIBITION OF INTEREST IN HOLY QURAN AND HADITH

The biggest difference between Islamic banking and conventional banking is interest in this blog we are going to read that why Muslims do not want riba what their holy book Quran says about interest (riba) and what Prophet Mohammad peace be upon him said about interest I collected these notes from different books of Islamic banking courses from the library of my institute of Islamic Finance and a study notes of my own when I was doing diploma in Islamic banking let’s begin to know why Muslims don’t want riba in this world..

INTEREST IN THE QUR'AN

1. First Revelation (Surah al-Rum, verse 39)

“That which you give as interest to increase the peoples’ wealth increases not with God; but that which you give in charity, seeking the goodwill of God, multiplies manifold.” (30: 39)

2. Second Revelation (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 for those among them who reject faith a grievous punishment (4: 161)”

3. Third Revelation (Surah Al ‘Imran, verses 130-2)

“O believers, take not doubled and redoubled interest, and fear God so that you may prosper. Fear the fire which has been prepared for those who reject faith, and obey God and the Prophet so that you may receive mercy.”

4. Fourth Revelation (Surah al-Baqarah, verses 275-81)

“Those who benefit from interest shall be raised like those who have been driven to madness by the touch of the Devil; this is because they say: “Trade is like interest” while God has permitted trade and forbidden interest. Hence those who have received the admonition from their Lord and desist may keep their previous gains, their case being entrusted to God; but those who revert shall be the inhabitants of the fire and abide therein forever.” (275)

“God deprives interest of all blessing but blesses charity; He loves not the ungrateful sinner.” (276)

I will post other verses some other time if God wills it.

INTEREST IN HADITH

1. From Jabir : The Prophet, , may cursed 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].” (Muslim, Kitab al-Musaqat, Bab la'ni akili al-riba wa mu'kilihi; also in Tirmidhi and Musnad Ahmad)

2. Jabir ibn 'Abdallah , giving a report on the Prophet’s Farewell Pilgrimage, said: The Prophet, , addressed the people and said “All of the riba of Jahiliyyah is annulled. The first riba that I annul is our riba, that accruing to 'Abbas ibn 'Abd al-Muttalib [the Prophet’s uncle]; it is being cancelled completely.” (Muslim, Kitab al-Hajj, Bab Hajjati al-Nabi, ; may also in Musnad Ahmad)

3. From 'Abdallah ibn Hanzalah : The Prophet, , said: “A dirham of riba which a man receives knowingly is worse than committing adultery thirty-six times” (Mishkat al-Masabih, Kitab al-Buyu’, Bab al-riba, on the authority of Ahmad and Daraqutni). Bayhaqi has also reported the above hadith in Shu'ab al-iman with the addition that “Hell befits him whose flesh has been nourished by the unlawful.”

4. From Abu Hurayrah : The Prophet, , said: “On the night of Ascension I came upon people whose stomachs were like houses with snakes visible from the outside. I asked Gabriel who they were. He replied that they were people who had received interest.” (Ibn Majah, Kitab al-Tijarat, Bab al-taghlizi fi al-riba; also in Musnad Ahmad)

There was a big amount of hadith and verses of Quran in my notes but I decided to pick some of them because of lack of time I am also preparing my thesis for phd in Islamic Finance and I give lectures in my institute of Islamic finance for the classes of Islamic Finance Degree but my students of diploma in islamic banking and islamic banking courses helped me lot to complete this article or blog and some of my friends in PhD in islamic finance and islamic finance degree students too.



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ISLAMIC FINANCE –PROHIBITION OF INTEREST IN HOLY QURAN AND HADITH

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