Riba, Bai, Profit & Rent Md. Fariduddin Ahmed Presented by Former Managing Director & CEO Islami Bank Bangladesh Limited Export Import Bank of Bangladesh Ltd. Sponsor CEO Jaiz Bank Ltd, Nigeria Former Advisor Former Head of Islamic Banking AB Bank Limited Secretary General Bangladesh Islamic Banker’s Association Member: Shariah Supervisory Committee of several Islamic Banks

Riba Dictionary Meaning: Arabic word Riba means increase, excess, expansion, addition, growth, superior, increase of anything from its original amount. Technical Meaning: It means interest/usury/sud etc. An increase which is without an equal counter value or iwad. Prepared by Forkan Uddin Mahmood

Riba Riba in the Holy Quran (Riba Nasiah) There are four revelations in the Holy Quran concerning Riba. These are: 1st Revelation: Surah Al-Rum, Verse-39 2nd Revelation: Surah Al-Nisa, Verse-160-161 3rd Revelation: Surah Ale- Imran, Verse-130 4th Revelation: Surah Al-Baqarah, Verse-275-281 Prepared by Forkan Uddin Mahmood

Riba al-Fadl: Riba in the Sunnah: From Ubadah Ibn Samit: The Messenger of Allah (s) said, “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt- like for like, equal for equal and hand to hand; if the commodities differ, then you may sell as you wish, provided that the exchange is hand to hand.” (Muslim). Prepared by Forkan Uddin Mahmood

Jewism: Riba in the other Religions: “If you lend money to a poor man, don’t become money lender and don’t realize interest from him.” - Exodus, 22nd line “You don’t lend money to your brother for interest- i.e. interest on money, interest on food stuff and interest on anything lent.” - Deuteronomy, 23rd line Prepared by Forkan Uddin Mahmood

Christianity: Hinduism: Buddism: Riba in the other Religions: “Lend hopping for nothing again.” - Luke VI 35 Hinduism: “Usury business is restricted within the Baithayas.” - Manusanghitaya Buddism: “Budda stipulated that a debtor can not become a Monk or Nun, mainly so that people would not use the monastic Sangha as a refuge from their financial responsibilities.” - www.buddhisma2z.com Prepared by Forkan Uddin Mahmood

Distinction between Riba Nasiah and Riba al-Fadl: In case of riba nasiah there is a time lag between give and take back of the counter values; but in riba fadl there is no time lag in between give and take of counter values. Prepared by Forkan Uddin Mahmood

Bai/Buying and Selling: Meaning of Bai: a) “Bai” means Buying and Selling. b) “Bai” means exchange of goods for goods, exchange of goods for money, exchange of money for money. c) “Bai” means exchange of counter values. d) Bai is taking of a goods by payment of recompense/indemnity. Prepared by Forkan Uddin Mahmood

a) Equivalence: equality of counter values. Conditions of Bai: a) Equivalence: equality of counter values. b) Reciprocity: Reciprocal exchange of counter values. Bai is a commutative contract. Prepared by Forkan Uddin Mahmood

Profit: Origin of Profit: Arabic word for profit is ‘Ribhun’. This means growth, surplus, residual, addition to capital. On the other hand loss means erosion of capital. Origin of Profit: Profit emanates from investment and no investment is possible without Bai. Prepared by Forkan Uddin Mahmood

Definition of Investment: Investment means to buy goods and services with a view to earning profit with risk of loss. When these goods and services are sold again, money comes back. This cyclic process may be expressed as follows: ‘Transformation of Money into goods with risk of loss, again Transformation of goods into Money’. Thus investment requires both capital and efforts. Prepared by Forkan Uddin Mahmood

Importance of Bai and Profit: Bai is essential for human existence/survival. Exchange is the foundation and essential characteristics of market economy. It co- ordinates between production and consumption. Trade is a Social obligation of all members of the society- Farde Keyfaya. Al-Quran declares profit as the bounty of Allah. Prepared by Forkan Uddin Mahmood

Importance of Bai and Profit: Profit is the driving force of economic activities. Profit is the source of Rizq. Acquisition of profit through business has been encouraged in the Quran and Sunnah. There is no limit to profit in Islam as there is no limit to loss. Prepared by Forkan Uddin Mahmood

Rent: In Arabic it is termed as Ajr which means consideration, exchange value, reward, wages, etc. It is the price of service of non-fungible goods, human beings and animal. The term ‘Ijarah’ has been derived from ‘Ajr’. Ijarah is one kind of Bai/Buying and Selling. It is a mechanism by which the services (usufruct) of non- fungible goods, human beings and animal are sold in exchange of Rent (Ajr) keeping the goods and its ownership unsold. Thus it is an exchange of counter value, one side being the service and the other side the ‘Rent’. Therefore, it is Halal. Prepared by Forkan Uddin Mahmood

Sin in Riba transactions: From Jabir : The Prophet (s) cursed the receiver and the payer of interest, the one who record it and the two witnesses to the transaction and said, “They are all alike (in guilt)” - (Muslim, Tirmidhi and Musnad Ahmad) Prepared by Forkan Uddin Mahmood

World Population by Religion Prepared by Forkan Uddin Mahmood

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