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The Objectives of the Prohibition of Riba By: Elhadi Habbani

12-13-2013, 07:45 PM
الهادي هباني
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The Objectives of the Prohibition of Riba By: Elhadi Habbani

    Introduction:
    Although Islamic finance industry has grown rapidly during the last 40 years and become a universal phenomenon as part of the international whole banking industry evolution which is moving very fast in terms of innovation of new products, financing practices, contracts, modern hedging tools, and new services putting serious challenges before Islamic industry to exert more efforts at all levels to create a competitive alternative Shariah permissible hedging tools and financing instrument to meet the rapidly increasing customers' needs, most of researches relating to Riba remains somewhat rigid and irrelevant to these serious changes concentrating only in the texts rather than the objectives of Shariah except very few papers including Maqasid al Shari’ah in the Prohibition of Riba and their Implications for Modern Islamic Finance by Dr. Monzer Kahf prepared for the IIUM International Conference on Maqasid al Shari’ah, August 8-10, 2006 which is considered as the first unique paper that identified eight essential objectives of prohibition of riba with a real open minded towards the complicated fast moving banking industry particularly Islamic banking clarifying some common misunderstandings to the concept of Riba and interest in a very simple modern way of discussion which is really helps in creating new prospective Shariah permissible structured financing instruments.
    In this paper which consists, in addition to the introduction, four sections and conclusion plus some recommendations.
    In Section One I will explain the meaning of Riba in language and in Fiqh. And in section 2 I will discuss Riba in Quran and Sunnah as well as the Riba and interest, Riba and trade, and also presenting briefly some theories in prohibition of Riba.
    Section 3 will be reserved for the objectives of the prohibition of Riba. And finally in section 4 I will discuss the implications of the objectives of the prohibition of Riba.
                  

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12-13-2013, 07:51 PM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Section one: What is meant by Riba:
    Riba in language; the meaning of the word Riba:
    Riba is "an Arabic word, derived from the verb Raba that literally means ‘to grow’ or ‘expand’ or ‘increase’ or ‘inflate’ or ‘excess" . It also means "An elevated place or hill is called because of its superiority or (increase) in height in comparison with the adjacent places . And based to Alqurtubi in his book (Aljami Li Ahkam Al-Quran) It also means "excess" . So most of scholars agree that the precise meaning of Riba in Arabic language is an access, increase, grow, inflate, multiply …etc, like to say Raba Al-Mal or else increased. Or to say the thing Raba or else rose and towered, or to say the horse bulged from a run or panic .
    Based on ejabat google (Raba in Arabic also come from the word hill which means reputation, height, and pride. Ibn Manzoor said: The thing Raba from Yarbu, Rabwan, "ربا، يربو، ربواً" and Raba, increased and grew, so everything grows and increases the so-called Riba, and from it, extracted the word Riba or "Usury". Ibn Manzoor said in Rabwah (eminence, elevation, or hill) elevation: "All what rose from the ground and mounted") .
    Based on (Qamus Al-Maani) Riba also means Al-Fadl and Alziyadah which means that the Arabs in their language even before Islam used the word Riba to refer to both Riba of exchanging commodities with increment or exchanging cash or debt.
    The above meaning of Riba was also supported by Dr. Monzer Kahf who said (Riba is an Arabic word that means increment/increase)
    Despite the different interpretation of the Arabic word Riba there are semi-unanimity in translating it in English as "Usury" 4 centuries ago, which means in some English dictionaries (the act or practice of lending money at rate of interest that is excessive or exorbitant at a rate of interest higher than is allowed by law ), and as "Interest" for the last centuries until today which means the fee charged by lender to borrower for the use of borrowed money, usually as an annual percentage of principal; the rate is dependent upon the time value of money, the credit risk of borrower, and the inflation rate. Here, interest per year divided by principal amount, expressed as percentage. Also called interest rate
                  

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12-13-2013, 07:53 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Riba in Fiqh:
    Although most of scholars have agreed that the meaning of Riba in Arabic is "excess, increase, or growth as explained before, and the same meaning has been mentioned in many verses in Quran as well as in Sunnah. Not all increase or growth meant to be considered as prohibited Riba in Islam. The Qur’an did not mean any increment as it refers to an increment in a specific transaction, “the” Riba that was common and known among the Arabs and other nations at the time of revelation . Although it has been generally interpreted in English language as “usury” and interest as said before, but it has a much deeper, unique, and wide-ranging meaning extracted from the ancient trading practices of Arabs before Islam, which were quite related to their life norms at that time, for, In the pre-Islamic and even early Islamic era, Riba implied the increase of money for an additional time span of a loan maturity. The pre-Islamic and early Islamic Arabs, in their trade practices used to lend money, leave its principal unmoved with borrowers, and receive a continuous interest over principal as a charge for delaying full settlement of the principal plus its pre-determined interest, and so on, they continue claiming the principal plus the interest at the due date from the debtor, and if he/she was not ready to pay off, they would put additional charge and extend the maturity again and again. Which means that one of the most essential aspects of the trading norm of the pre-Islamic and early Islamic Arabs was the dominance of financial transactions with pre-fixed successive maturities with revolving interest.
    While generally in Shari'ah, Riba refers to the increment percentage that borrower must pay to the lender above the principal amount as a quite linked provision for the loan, or as a compensation to the same lender for any additional extension beyond the maturity of the same loan, the most broader and unique meaning of Riba within fiqh terminologies that reflected the prehistoric trading life of Arabs refer to two kinds of derivative Riba. Riba al-nasi’ah and Riba al-fadl.
                  

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12-16-2013, 11:01 AM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Riba al-nasi'ah:
    Based on the definition of the Portal of General Presidency of Scholarly Research and Ifta of the Kingdom of Saudi Arabia "Riba al-nasi'ah is derived from the Arabic root "nasa'a which means "delay or "defer". This type of Riba falls into two categories: the first one: Charging interest on the loan lent to an insolvent debtor. This category was commonly practice in the pre-Islamic era. A person, for example, may lend another person a sum of money to be paid back on a specified date. When the date agreed upon is due, the creditor gives the debtor the choice either to repay the debt or defer repayment in return for charging additional interest on the principal. The Second one: Exchanging two items of the same type which bear the common cause of Riba Al-Fadl while stipulating deferment of delivery of one or both of the exchanged items. An example of this includes exchanging gold for gold or silver or exchanging silver for gold while stipulating deferment of delivery" . The term nasi'ah means to delay or to wait for agreeable time period consented to the borrower to pay the principal with its interest or to suspend the payment for another period against additional excess or interest.
    It is quite obvious that the prohibition of Riba al nasi’ah in essence come mainly from the concept of fixing a positive return on an asset that, by nature, can't create value or increment as a compensation just for waiting some time which is not permitted by Shari’ah.
                  

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12-19-2013, 05:52 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Riba al-fadl:
    Based on the definition of the PGPOSAI also "Riba Al-Fadl is derived from the Arabic root "fadl" which means "increase' or "growth". This type of Riba involves increase in either of two articles subject to exchange. According to Hadith of the Prophet, six things are susceptible to Riba Al-Fadl: gold, silver, wheat, barley, dates, and salt. It is prohibited to charge interest on such transactions where any of the above things are exchanged for articles of the same type. The same holds true with regard to exchanging two articles which bear the same common cause of prohibition. It is, for complete, prohibited to exchange kilo of gold of gold of inferior quality for half of a kilo of superior quality. The same is applicable in the case of exchanging a good type of silver, wheat, barley, dates, or salt for a poor type. It is only permissible to exchange articles of the above mentioned things provided that they are equal in weight and the exchange has to be made in a hand-to-hand transaction. However, it is permissible to exchange a kilo of gold for two kilos of silver provided that it is a hand to hand-to-hand transaction. This is because gold and silver are different types. The prophet (peace be upon him) said, (Gold is to be exchanged for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, like for like and equal for equal, payment being made hand to hand. If these classes differ, then sell as you wish if payment is made hand to hand. Narrated by Muslim from the Hadith narrated on authority of Ubadah ibn Al-Samit (may Allah be pleased with him)" .
    It is quite understandable that Islam meant not only to get rid of the exploitation that built in the foundation of interest, but also all manners of unfair exchange in business transactions. This means that although sale is permitted in Islam, in general, it does not mean that all kind of sale or the whole thing in sale is agreed to in Islam.
    Since, Riba al-nasi'ah was involved in the verse “Allah has allowed sale and prohibited riba” (2:275), it is used to be called "Riba Al-Quran", while Riba Al-fadl used to be referred to as Riba Al-Hadith because it was not clearly understood from the Holy Quran and has been undoubtedly addressed in Prophet Hadith; (Gold is to be exchanged for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, like for like and equal for equal, payment being made hand to hand. If these classes differ, then sell as you wish if payment is made hand to hand. Narrated by Muslim from the Hadith narrated on authority of Ubadah ibn Al-Samit (may Allah be pleased with him.).
    Some people also classified Riba to Riba Al-Duyun which includes: Riba Al-Qard referring to the situation in which the Riba or interest imposed at the beginning of the loan, and Riba Aljahiliyah referring to the Riba or interest imposed after delinquency; And Riba Al-Buyu'u which refers to the kind of Riba that occur due to the exchange of two similar Ribawi items with deferment of delivery. Despite that the classification of Riba in Fiqh to Riba Al-nasi'ah and Riba Al-fadl remains the broader main types implicitly includes all the other somewhat complicated classifications which refer to the same meaning; both of Riba Aljahiliyah and riba Al-Qard give the same meaning of Riba Al-nasi'ah which is normally occur when a loan contract created or when an existing debt is extended so it is meaningless and more complicated to divide this obvious and very simple definition into two terms.
                  

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12-19-2013, 06:01 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Section two: The prohibition of Riba:
    Riba in Quran:
    As explained before that most of scholars and "Fuqaha" who interpreted Quran claimed that the type of Riba meant in Quran verses refer to Riba Al-nasi'ah or Riba Al-Jahiliyah which was dominant practice within the trading life of the ancient Arabs in the Arab Peninsula during the pre-Islamic period. So most of them agree on the fact that Riba has been managed and prohibited in Quran step by step not in a radical way such like the prohibition of Liquor and some others major sins mentioned in Quran in order to lead-up them gradually, as a wonderful method of managing change, to know its injustice and the damage it can cause to the whole society and reach with them to the final clear cut stage of definite prohibition. According to M. Umer Chapra that "The prohibition of riba in Quran developed gradually and appeared in four revelations. The first revelation was revealed in Makkah before the prohibition of riba for which the verse paved the way. It says: “And whatever you lay out with the people in order to obtain an increased return, this increases you nothing with Allah, but whatever you give in alms, seeking Allah’s pleasure, it is those who receive multiplied recompense”, [Chapter al-Rum (The Romans) 39] . It is quite obvious that Quran in this verse comparing Riba and the fate of their takers with alms, charity or zakat and their payers. As if, at this first stage, it was trying to encourage, give confidence, and persuade people to avoid Riba. In the second stage in (Surat al-Nisa: Verses 160-161) Quran addressed the experience of riba in Jews trading society as an example of extreme injustice and inequity saying "For wrongdoing on the part of the Jews, We made unlawful for them [certain] good foods which had been lawful to them, and for their averting from the way of Allah many [people]" "And [for] their taking of usury while they had been forbidden from it, and their consuming of the people's wealth unjustly. And we have prepared for the disbelievers among them a painful punishment". Although this revelation made some confusion amongst many scholars about who meant here by the prohibition, Muslims or Jews, it is quite understandable that the verse was heading for Muslims because "the discontentment with riba first occurred while Prophet Muhammad (pbuh) was still in Makkah and there were very few Jews in Madinah at that time. Besides, the Jews in Madinah were mostly involved in the agricultural sector and not in the commercial sector" .
    The third stage of prohibiting Riba in Quran revealed during the second or third year after Al-Hijrah of the prophet Muhammad, "enjoying Muslims to keep away from Riba if they desired their own welfare. It may be noted that there is a graduation in the strength of the word used i.e. "devour' any person who apprehends the impression created by this word on the Arabs, who were disgusted if one was described us a glutton, will comprehend fully strength of the ban intended in the message" . So from Quran – Surat Al-Imran – verse 130 "O you who believe! Do not devour riba, doubled and multiplied; but fear Allah; that you may (really) prosper" It is also quite clear that this stage was prohibiting the act of charging multiple riba using a stronger terms and wording as Islam after Al-Hijrah become stronger and started to establish the well organized and modern Muslim regime and the legislation verses of Quran started to be revealed gradually.
    The final stage on the prohibition of riba was revealed in Al-Madinah near the completion of Prophet Mission in (Surat Al-Baqarah: Verse 275)“Those who eat riba will not stand (on the Day of judgment) except like the standing of Shaitan leading him to insanity. That is because they say: “Trading is only like riba,” whereas Allah has permitted trading and forbidden riba. So whosoever receives an admonition from his God and stops eating riba shall not be punished for the past; his case is for Allah (to judge). But whoever returns (to riba); such are the dweller of the Fire – they will abide therein”.
    It was the final revelation on prohibition that has put the definite prohibition of all kind of Riba. if we look to the verse we can clearly understand the following:
    1- It strictly disapproved Riba by saying "whereas Allah has permitted sale and forbidden Riba".
    2- It clearly distinguished between sale and Riba by saying "that because they say: "sale is just like Riba but Allah has permitted sale and forbidden Riba".
    3- It also confirm the prohibition of Riba that has already been imposed in the preceding revelation in Surat Al-Imran and fixed the terrible fate that will be met up in this world and the next as a punishment for disobedience of departing Riba.
    4- It defined clearly the prohibited Riba as any increment above principal by saying "But whoever returns (to riba); such are the dweller of the Fire – they will abide therein. It is also defined in Surat Al-Baqarah, verse 279 "… But if you repent, you may have your principal…"
                  

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12-19-2013, 06:05 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Riba in Sunnah:
    Quran, as explained in the four pre-mentioned revelations, has clearly prohibited Riba particularly the final revelation in Surat Al-Baqarah: verse 275 which has been considered among most scholars not only laid down the final definite prohibition of Riba, but also has differentiated between trade and Riba as well as defined it as an increment over the principal amount. And for that reason the Riba mentioned in Quran, commonly known as Riba Al-Quran, is considered among most of scholars as Riba Al-Jahiliyah or Riba Al-nasi'ah as explained before.
    In Al-Hadith or Sunnah, there are numerous narrations on the prohibition of Riba, but due to the fact that the differences between Hadith and another and from narrator to another the paper will present only the most popular narrations.
    While Quran prohibited Riba gradually as said before, Al-Hadith followed different method within which some narrations prohibited Riba in general, and some others prohibited a specific types of Riba such as Riba Al-nasi'ah and Riba Al-fadl. However Riba Al-fadl was only mentioned in Al-Hadith and this why it is commonly called, by some scholars, as "Riba Al-Hadith".
    Following are some of the most popular narrations classified to some narrations that prohibited Riba in general and some others prohibited other type of Riba mainly Riba Al-fadl:
    1- Prohibition of Riba in General :

    • From Jabir. The Prophet 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" 'Narrated by Muslim" .
    From Anas bin Malik: "the Prophet said "When one of you grants a loan and the borrower offers him a dish he should not accept it and if the borrower offers a ride on an animal, he should not ride, unless the two of them have been previously accustomed to exchanging such favours mutually" (Sunan al Bayhaqi, Kitab al-Buyu, Bab kullu qardin jarra manfa‘atan fa huwa riban).
    From Anas ibn Malik: "the Prophet said "if a man extends a loan to someone he should not accept a gift" (Mishkat, op. cit., on the authority of Bukhari's Tarikh and Ibn Taymiyyah's al-Muntaqa).

    2- Prohibition of Riba Al-fadl :

    • From Abu Said Al Khudri: (Prophet said (Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, like for like, and hand-to-hand, if commodities differ, then you may sell as you wish, provided that the exchange is hand-to-hand ..etc.)
    Out of the above-mentioned Hadith, which constitute the main justification of naming Riba Al-fadl as Riba Al-Hadith, scholars have figured out the following rules which govern Riba Al-fadl :
    • In trading commodities of the same group and kind, such as gold for gold or dates for dates; two conditions must be fulfilled:
    - Both quantities must be exactly equivalent
    - There must be immediate delivery
    • In trading different commodities within the same groups, such as gold for silver, or date for barley; there is only one condition, i.e. the promptness in delivery, equality is not a condition.
    • In trading commodities of different groups and kinds, such as gold for wheat, or silver for barley; no condition is imposed and free trading can exist, whether there is equality, inequality, promptness, or delay. But imposing additional charge to the debt in case of delinquency is totally prohibited.
                  

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12-19-2013, 06:20 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Riba and interest;
    As the paper explained before, that the Riba mentioned in Quran was referred to the Riba which was dominant among Arabs trading life before Islam. Based on that, as also explained before, Riba in Quran refer to Riba Aljahiliyah or Riba Al-nasi'ah which means the extension of the maturity of an existing debt against additional charge to the outstanding balance of the debt, or granting a new loan with an increment to be paid after deferred period of time either on an installments structure or pullet payment. The Qur’an itself (said Prof. Monzer Kahf) implies this definition as it states: “But if ye repent ye shall have your principal, doing no injustice (against others) and no injustice is done against you” (2: 279). This part of Verse 2: 279 has two important indications: 1) it defines Riba as any increment above the principal of a debt or a loan; and 2) it describes such an increment as unjust. The exclusion of profit, being an increment in sale, is given by Verse 2:275 “But God made sale permissible” . So the increment either on the issued loan or on the existing debt is done based on the time that the creditor has to wait until full payment which means that, like the dominant concept of Interest in the contemporary financial industry within which time represents the corner stone based in which interest rate, in any financial market, is defined and fixed because time, by nature not as an abstract meaning, implies uncertainty or risk. Nobody exactly knows what is going to happen tomorrow or even after one second, but future can be predicted using different methods of financial analysis and risk assessment and then decide how to evade, get around, and mitigate the future uncertainty. So, interest rate in contemporary financial era, like Riba, defined as an increment on a loan or extending the maturity of existing loan and some time as the return that entrepreneur need on his/her capital or investment which is also can be applied in the concept of Riba, interest rate is also defined as a product of a compounding of risks premiums, such as, inflation risk premium, default risk premium, maturity risk premium, and liquidity risk premium which also can be applied to Riba since time element is there. But a lot of papers criticized this point of view based on the following:

    1- They assert that interest doesn't refer to Riba because interest, as used in the present day of economical and financial terminologies, extends further than fixed rates of return on loans in-kind, and more general and broad-spectrum claiming that Islamic finance doesn't accept the concept of "time value of money". This is not correct because in Islamic Shariah, based on most of scholars, "time has a share in the price" . certainly, this justify that all of Islamic financial institutions working with different kinds of deferred sales instruments with (cost + profit) such as Murabahah, Musawamah, Ijarah which are represents 72% for Murabahah and Musawamah in 2008/2009 and 13% for Ijarah in the same period.
    The additional excess over cost in Islamic institutions is totally acceptable as a compensation to creditor for the deferment because deferment has a share in the price. So, given the Islamic institution complied with some certain Islamic Shariah conditions explained in the Ribawi items of Abu Said Al Khudri, selling one item for one price on cash basis, and the same item for a higher price on a deferred basis, is quite permissible in Islamic finance. So, it is quite obvious that Riba, as mentioned in Quran, and Interest have got the same meaning.
    But it is very important to distinguish between the concept of the term "time value of money" in conventional banking and Islamic banking. While the former completely linked time to no asset rather the money or the cash that has been loaned to the customer which is not able to create value or add an increment in itself by nature because money in the form of currency from an economic point of view considered as a store of value and so its purchasing power always dependent on the real values of products and services that can exchange, and the impact of inflation on the value of them. The later, or the concept of time value in Islamic Finance, is quite linked to a real asset not money because it is based on a real sales contract within which money is only way or tool of exchange and the impact of inflation and the other economic forces will affect directly on the value of the real asset being the subject of the sale contract not on the money or the cash.
    2- They also claim that since Riba Al-fadl was not mentioned in Quran and isn't like Riba Al-nasi'ah which is similar to the concept of interest, that Riba doesn't mean Riba and so, interest is more general and broader than Riba. But this argument also is not valid. Despite that Riba Al-fadl has not been clearly mentioned in Quran. Although Riba mentioned in Quran refers clearly to Riba Al-nasi'ah which is the extension of the maturity of a debt against additional charge, or granting new loan with an increment, I can see no different, in the general concept, between the two types of Riba for the following justifications:
    • Loan in Shariah is not a sale contract, it is a contributory and not for profit contract. Although it transfers ownership and create debt, but doesn't create any value and the debt has no specific maturity and cannot be charged.
    • Since the for profit contracts that create debt are based on either exchange contracts, or sharing contracts, it is not permissible to impose any additional charge on the outstanding of the debt created through these Islamic contracts.
    So since finance, in general, refers to the means to acquire assets by creating deferred obligations or debts, and interest-free lending (or contributory contracts) and deferred sale of goods and services contracts constitute the main sources of creating deferred obligations or debt the difference between Riba Al-nasi'ah and Riba Al-fadl is not important as far as there is a deferred obligations or debt in the two cases.
                  

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12-19-2013, 06:27 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    What is wrong with Debt:
    The main general problem with interest that make it injustice coming from its association with Debt whether it is new issued or existing one and its invalid assumption that debt can create value while debt is not a real asset.
    The following are some characteristics of debt that make it invalid for commercial and for profit activities:

    1. Debt in nature is a benevolent and represents an inter-personal transaction between the giver and taker of the debt (loan). So it is illogically to handover a charity to someone with charge above the required amount of the loan.
    2. Debt also, by nature, is an abstract asset. Once handed over to the taker It become an obligation or liability on him and, in the same time, become an abstract asset to the giver with no real tangible or touchable existence although it will be counted as part of the wealth of the giver.
    3. Debt has no intrinsic utility or built-in benefit.
    4. It is unable to increase or decrease, or to produce increments or add value because it is abstract asset that has no inherent usefulness. So it deserves no compensation or any additional charge. It can't grow or decline except in our imagination or in the debt market which is subjective, elusive, unreal, tend to take from the whole economy without any capability to add value just like any parasite creature who live dependent on the production of other creature devoid of any kind of give-and-take sense. Said Prof. Monzer Kahf "By its nature and in real life a debt is not liable to increase or decrease; it is not able to produce increments because it has no intrinsic utility other than being an ingredient of wealth. In other words, debt can’t have different values at different times and places unless we create additions in the form of assumptions; that is by creating a debt market and valuating or assessing debts in relation to time. Additionally the amount of an increment in a debt is also assumptive; it depends on the conditions and externalities in the imaginary market that we create for debts" .
    5. It constitute a sacrifice from giver to the sake of taker deserves no compensation. Any compensation to the giver as a price for his sacrifice will violate ownership principal because loan, by nature, transfer ownership although it doesn’t add any value. When the loan handed over to the taker he immediately become the owner of the property or the money loaned, and therefore he has an exclusive authority on his property enjoying its benefit and bearing its risk. The giver who become an owner of abstract debt once he handed the loan to the taker, has no right to claim any increment charge otherwise it will be authorized infringement to the private ownership of someone else which is not permissible in Islamic Shariah. The personal loan, as said Prof. Monzer Kahf "must remain personal and deserves thanks, gratitude and appreciation from the borrower and may be a reward from God too but it is not a contributor to value creation" .
                  

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12-19-2013, 06:28 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    What is wrong with interest:
    Based on the imperfections of debt we can easily reach the wrong with interest that made it equal to the prohibited Riba in Islam. The following are some of the main imperfections of interest :

    1. It is based on invalid postulate: that debt creates value
    2. Violation of property rights and the entitlement to return and responsibility of loss principle
    3. Deviation from reality in existence of increment and in its amount
    4. It allows rescheduling with increment and inter-bank debts transactions; both do not create value. . .
    5. It does not preclude financing non-productive and non-desirable activities, does not enable moral screening
    6. It expands the financing market beyond the needs and size of real market
    7. Because it is only credit-worthiness-based, interest-based lending favors the rich at the expense of the productive use of funds
                  

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12-19-2013, 06:28 PM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    What is wrong with interest:
    Based on the imperfections of debt we can easily reach the wrong with interest that made it equal to the prohibited Riba in Islam. The following are some of the main imperfections of interest :

    1. It is based on invalid postulate: that debt creates value
    2. Violation of property rights and the entitlement to return and responsibility of loss principle
    3. Deviation from reality in existence of increment and in its amount
    4. It allows rescheduling with increment and inter-bank debts transactions; both do not create value. . .
    5. It does not preclude financing non-productive and non-desirable activities, does not enable moral screening
    6. It expands the financing market beyond the needs and size of real market
    7. Because it is only credit-worthiness-based, interest-based lending favors the rich at the expense of the productive use of funds
                  

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12-22-2013, 04:45 AM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Theories in Prohibition of Riba;
    There are some theories and arguments propounded by some writers trying to legalize Riba in some types of loans by sectors or segments of the economy or specific type of interest; such like consumer loans versus investment loans, Individuals Versus Institutions, compounding versus simple interest, and nominal versus real rate of interest or return. The paper will briefly discuss these theories as follows:
    Consumption Loans Versus Investment Loans (Al-Darurah):
    The supporters of this argument distinguish between consumer loans refereeing to the financing individual consumption needs like homes, furniture, electronics and electrical equipments, and investment loans referring to corporate or commercial loans or any financing to the business sectors. They ban Riba or interest on individuals consumer loans and legalize it on corporate or businesses financing.
    They argue that the main reason of prohibiting Riba in Quran is to dampen unnecessary consumption and encourage production which will create new job opportunities and minimize the unemployment percentage to the minimum acceptable levels, foil any kind of economical misuse of poor people, support development, economize the minimum acceptable standard of living, and economic stability for the whole society. They support their argument by claiming in the pre-Islamic period and even in the early years of Islam borrowing for commercial purposes was not carried out, and consumer loans were the only dominant kinds of financing therefore, Riba or interest on commercial loans is not prohibited.
    The opposite criticism of this theory by different traditional and even modernists writers claim that even if Riba on commercial loans were not practiced at that time when the prohibition of Riba was not made, Riba in commercial loans is still prohibited. They support their standpoint by saying that most kinds of alcoholic beverages available today did not exist in the time liquor prohibited. Yet all kinds of liquor still prohibited and will remain prohibited in future. Beside there are many evidences that commercial loans were widely dominant during that time. The circumstances The location of Makkah as a focal point of trading at that time, and the trade of Quraish, Riba Al-Abas within which he granted loans to farmers and merchants not at all to individuals, all tend to support to the argument that loans were also practiced in businesses at that time.
    So, the conclusion of this debate is that the prohibition of Riba in Islam is for both individual consumer loans and corporate loans.
    This theory is also called, by other modernists the theory of Al-Darurah, said Dr. Engku, "The third theory is the theory of Al-Darurah (necessity) and changing circumstances, in which, its propounders claimed that Riba is only prohibited on consumption loans not production loans. Thus, because of necessity and changing circumstances, interest rate becomes permissible. This has also been proven to be faulty because historically, the practice of giving loans for production was common since Al-Jahiliyah and thus, is included in the prohibited Riba Al-Jahiliyah. Also, the idea of necessity which the propounders of this theory tried to build is inconceivable since necessity cannot be imagined to dominate the whole system, as Abu Zahrah said "… necessity is only found in individuals, because if not, then it means that the whole society needs al riba like need of starving person to eat the dead …" .
                  

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12-23-2013, 06:57 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Nominal Versus Real Rate of Interest:

    Another debate between different views and theories on riba that the supporters of this theory argue that there is no hadith on Riba regarding the effects of inflation and deflation on the loan. Since, Inflation diminishes the purchasing power of currency, and deflation increases it, the giver of loan is subject to the inflation risk which therefore it is quite justifiable to compensate him by additional risk premium or interest rate in inflationary economies. The supporters of this theory claims that allowing interest on inflationary economics only there is no real pre-intention to support the benefit of the giver of loan rather than help him/her to preserve the real value of his/her benevolent loan at the occurred at first place because the declining of givers money due to inflation is not their fault since inflation is considered as a systematic risk which can't be avoided by anyone in the society.
    The adversaries of this theory claiming that any increase on loans regardless of inflation or deflation would be a clear violation to Quranic and Sunnah in prohibiting Riba. It is argued, since Riba is considered in Islam as a one of the most bigger sins, it is not acceptable to legalize a bigger sin to fight another sin.
    More over from the point of view of the author of this paper debt is an abstract and stagnant asset that doesn't make increment or value so inflation or deflation do not have any positive or negative impact on it, real asset only, whether it is products or services that subject to be impacted positively or negatively by inflation or deflation which is supporting the prohibition of Riba, and encouraging exchange of products and services which is, in turn, quite permissible in Islamic Shariah.
    So, the argument of nominate and real rate of interest or inflation versus deflation is applicable here.
                  

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12-26-2013, 03:48 AM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Individuals Versus Institutions:

    Some writers also assert that the contemporary banks and other intermediary institutions, which are large in their scale, did not exist at the pre-Islamic period and the time of the Prophet, so the interest imposed by the current intermediaries doesn't mean the prohibited Riba in Islam. And they think that the prohibited Riba involves individuals only. So in their view paying interest by individuals for these intermediaries should not be prohibited because it is most likely difficult for individual to exploit such a larger institutions.
    The opponents of this theory claim that the prohibition of Riba in Quran is inclusive all-around the glob and doesn't differentiate between institutions and individuals. They also claim that since, borrowing and lending is one of the major functions of intermediaries they definitely involves exchanging Riba. So, paying or receiving interest fall under the prohibition of Riba in Islam, no matter, it has been practiced by individuals or institutions.
                  

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12-26-2013, 03:52 AM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Compounding Versus Simple Rate:

    This theory claims that the prohibited Riba is Riba Al-Jahiliyah which they think it is similar to the compounding interest rate. Alternatively they argue that the simple interest rate calculated and imposed at the time of contract doesn't constitute the prohibited Riba. But this theory has been widely criticized by many scholars and found to be unlawful.

    The Theory of Comprehensive Public Need (Al-Hajah):

    The propounders of this theory claim that, the comprehensive public need or "Al-Hajah" is acceptable justification to legalize interest or Riba because all the society will benefit. This theory had also been condemned on the ground that the supporters could not specify clearly the Riba which is deliberately prohibited and the Riba which is preventively prohibited.
                  

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01-02-2014, 07:18 PM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Section three: The Objectives of the Prohibition of Riba:

    It is very difficult, as mentioned in the introduction of this paper, to find comprehensive researches extracting the objectives of the prohibition of Riba and identify them clearly, because firstly, the notion of Objectives of Shariah in general is somewhat new science, and secondly extracting these objectives from Quran, Sunnah, and Fiqh is very difficult job need time, efforts, and cooperation.
    Out of many papers I have gone through, I found that the paper "Maqasid al Shari’ah in the Prohibition of Riba and their Implications for Modern Islamic Finance by Dr. Monzer Kahf prepared for the IIUM International Conference on Maqasid al Shari’ah, August 8-10, 2006" is the first unique paper that identified eight essential objectives of prohibition of riba that really helps in creating new prospective Shariah permissible structured financing instruments. So these eight objectives will be the base of this section with some additional from some other references that supports the same opinions.
                  

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01-02-2014, 07:19 PM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Affirming Realism;

    Realism is considered one of the most important general conditions of Islamic finance contract that has been extracted from Fiqh. It represents one of the nearly all unique principal that distinguish Islamic finance from conventional finance. Prohibition of Riba came to prevent and confirm this principal because there is no reality in any transaction that contains Riba as explained before. The consequences of unreality in Riba, which are very dangerous having negative impact on the whole economy, can be explained in the following two major points:
    1- The purpose of the finance application, which represents the first important question that the bank asks at the initial interview with the customer, in conventional banking is not only missing, but also having a no consideration from conventional bank because it is going to lend customer liquid money, which normally short term finance, in a form of loan or overdraft … etc. no matter in which purpose the customer will spend that money. Beside the absence of reality and moral screening to the contract object in this case, the customer might use the short term loan or over draft to finance long term asset which, in turn, lead to a definite delinquency and this actually what is widely and deliberately happening in conventional bank because, by nature, they benefit from customers delinquency to add more interest or Riba.
    2- Since debt, as explained before, doesn't create increment or value, so lender doesn't deserve any return. Thus, one of the objectives of prohibition of Riba is to prevent and confirm the rule of return that it should be coming only from the a real asset, having real utility, and able, by nature, to create increment.
                  

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01-03-2014, 03:41 AM
إبراهيم عبد العزيز عثمان
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Thanks Mr. Elhadi !!

    It is a well researched topic that covers all the aspects of the interest issue. I may concentrate on the main objective of interest is to increase the unfair distribution of wealth among people which is cited in many verses of the Quran. The end result of excessive interest is making the rich more richer and the poor more poorer. It creates a vicious cycle of poverty by pushing those who live in the margin of society to indulge deeper into an endless loop of poor consumership. Interest helps in feeding inflation at an alarming rate !!! Inflation is the chronic cancer of the modern day economy.

    The best example is the credt card inflated rate of compound interest which ranges between 18%-25% !!! Though how simple it looks but many teenagers fall into this setup trap of getting a credit card that will give them some sort of financial indepedence at the outset of their manhood life. While in fact it throws them deeper into this circle of being in debt for the rest of their lives. Many people, specially new immigrants, are completely unaware of the deadly accumulated compound interest that they should pay in a simple transaction of buying a car or a house if you do not have a considerable amount of its original price. These poor teens feel excited by owning something but unaware that the small amounts they pay every month might go for ever if they do not pay a hefty amount of the main principal. I personally call it modern time slavery which is far worse than the known old slavery trade. At least the latter includes some human gestures of forgiveness but the former type is a one way venue. These lenders are vampires who suck your blood and sweat to the last drop.
    However, I do invite Sudanese parents who reside in western countries is to explain early to their teens the dire consequences of this detrimental lucrative trap of using credit cards lavishly while not owning the means to pay it sooner !!!! It is better to hold tightly on horses before falling into the debt (death) ravine....!!!
                  

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01-12-2014, 11:28 AM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: إبراهيم عبد العزيز عثمان)

    Thanks dear Ibrahim for your valuable commentary.

    Inflation and interest rates have an inverse link. Inflation refers to the rate at which prices for goods and services rises. Interest rate refers to the amount of interest paid by a borrower to a lender which represents the risk free rate plus compounding of different other risks premiums and sometimes the local Central Bank regulates and fixes interest rate. In general based on the rule that inflation and interest rates have an inverse relationship, as interest rates are lowered, more people are able to borrow more money so consumers have more money to spend, causing the economy to grow and inflation to increase. The contrary remains true for rising interest rates. As interest rates are increased, consumers tend to have less money to spend. So, less spending, the economy brakes and inflation decreases.
    I agree with you in genearal that credit cards nowadays attract consumers to consume more but it can not continue pushing infation rate to higher levels unless it came with very low interest rate.
                  

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01-12-2014, 11:29 AM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: إبراهيم عبد العزيز عثمان)

    Thanks dear Ibrahim for your valuable commentary.

    Inflation and interest rates have an inverse link. Inflation refers to the rate at which prices for goods and services rises. Interest rate refers to the amount of interest paid by a borrower to a lender which represents the risk free rate plus compounding of different other risks premiums and sometimes the local Central Bank regulates and fixes interest rate. In general based on the rule that inflation and interest rates have an inverse relationship, as interest rates are lowered, more people are able to borrow more money so consumers have more money to spend, causing the economy to grow and inflation to increase. The contrary remains true for rising interest rates. As interest rates are increased, consumers tend to have less money to spend. So, less spending, the economy brakes and inflation decreases.
    I agree with you in genearal that credit cards nowadays attract consumers to consume more but it can not continue pushing infation rate to higher levels unless it came with very low interest rate.
                  

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01-12-2014, 11:33 AM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Upholding the Sanctity of ownership;

    As we explained in section three that claiming increment or charge (interest) on loan after the ownership transferred to the borrower is considered as an unauthorized in infringement to the property of someone else, because loan transfer ownership and as result, the borrower becomes the owner of the money or, in other word, the "property", and therefore, he/she, as owner, he has exclusive authority on his property has full freedom to do what so ever he want by his/her property without any degree of infringement from anyone else. So one of the main objectives of prohibition of Riba is to protect and sustain this rule.

    Disallowing debt trade and exchange;

    Since debt is an abstract, and static assets that does not, by nature, has the capability to create increment or value, and has no real utility in real daily life of humankind, so it is not tradable. Trade, based on Shariah, must be only on real assets that have utility and real existence. So prohibition of Riba in relation to debt trade is to prevent the whole economy from the bad impact of unreal trade like debt trade and exchange
                  

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01-12-2014, 11:41 AM
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Redirecting all resources from unproductive to productive activities:

    By disallowing debts trade and exchange and affirming realism through the prohibition of Riba we can re-channel the totally huge economical resources misspend in unreal activities to a real production and encourage exchanging products and services which, in turn, foster trade and exchange among society and revive the circular flow of income in the whole economy.

    Preventing debt discounting or rescheduling for profit:

    Although in Islamic finance discounting for early settlement of debts is allowed provided that it is not part of the contract and be only as incentive from creditor to debtor to take place only after full early settlement, the prohibition of Riba in Islam is aiming to protect the society from the bad consequences of trading and rescheduling debts for profit. Because these are non-productive activities as they only transfer wealth from one person to another.
                  

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01-18-2014, 09:50 AM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Preventing the use of business finances for Uselessness Purposes:

    As said before in the first objective (Affirming realism), ignoring the purpose of finance application lead to finance unproductive useless purposes and activities that might not belong to business or what we can call it "futility" or "uselessness". Futility" and which might lead to definite delinquency because the purpose of finance will not be used into the main business of the firm and will add nothing to its asset, instead of that, it will create additional liability to the company.

    Sending personal finance to where it belongs as a personal service:

    Since, loan considered in Shariah as a personal finance or inter-relation between the giver a taker based on the act of charity and benevolence, it should remain a personal free of charge service not a business regardless the usefulness that the taker can gain from taking the loan. This concept can only be protected by the prohibition of Riba.

    Re-channeling Business Financing to Production and Trade:

    Since, business financing can only be done, in Islamic finance, through exchange and sharing Islamic contracts within which realism is occurred and value creation is targeted, the prohibition of Riba, in forms of unreal financing like loan, overdraft, and discount bills, will protect the whole economy from the inflation of the quantity and size of financing in a society above the actual needs of the real market of production and exchange.
                  

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01-22-2014, 10:24 AM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Section four: Implications of the objectives of the prohibition of Riba:

    [Not for profit financing; lending, loan, personal financing;

    From the previous sections, we can understand that one of the most important implications of the prohibition of Riba in Islam is that loan or lending is not for profit because it has no capability to make increment or additional value and so it considered as charity or benevolent based on an inter-personal relation between lender and borrower such like any other contributory contract, and so, cannot be used for commercial purposes. Nevertheless, this fact doesn't mean to close eye, and continue seeking for suitable structured financing instruments while observing and keeping eye on the objectives of Shariah in general, and of the prohibition of Riba in exact, and in the same time seek to incentivize not for profit financing particularly in the case of current account in Islamic banks.
                  

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01-25-2014, 05:12 PM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    For profit financing; Islamic financing contracts;

    The second implication that can be extracted from the objectives of the prohibition of Riba is that the for profit activities in Islamic financing have its own unique inbuilt incentive systems through the main Islamic finance contracts, which are based on:

    1- The existence of real asset whether it is product or service;
    2- These products and services, by nature, are having real utility, capable to produce increment, and create new value;
    3- Transferring ownership without any degree of infringement once ownership transferred;
    4- The importance of moral screening in regards of the objects and to the purpose of finance on the light of Shariah principals as well as the law of the country where the transactions will take place;
    5- The permissibility of adding additional charge to the cost of goods or services in exchange contracts, or pre-fixing the percentage of profit sharing in sharing contracts no matter what methodology or what market benchmark financial institutions use in calculating profit rate;
    6- Profit rate once decided in the first place at the time of contract it cannot be changed except some special Islamic contracts like Ijarah;
    7- Consideration of the other main general conditions such as, consent, aptitude, representation, balance;
                  

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01-25-2014, 05:14 PM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Observing the objectives of the prohibition of Riba:

    1- The contemporary Islamic structural contracts;

    Since, Islamic financial institution is defined as "A depository/monetary institution of financial intermediation specialized in providing Finance in accordance with the tenets of Shari’ah especially realism. Morality and prohibition of Riba (interest)" . There is no difference, in the concept of intermediation, between Islamic and conventional intermediaries, both of them involve, mobilizing funds from surplus units, packaging size and maturity, and channel the mobilized funds to deficit units. The main differences only in the methodologies, principals, products, and financial structure. Therefore, Islamic intermediaries facing a very crucial challenges and tough competition in terms of efficiency, flexibility, innovation, compliance, and governance, which are required a unique and carful balancing between the need to comply with Shariah principals and to compete and prove quality and growth in a complicated and fast moving industry.
    Although, the Islamic hybrid (structured) contracts have proven success and a respectful worldwide movement, whether they are traditional hybrid contracts such as Murabaha, BBA, Investment Deposit, Parallel Salam. Parallel Istisna, or contemporary hybrid contracts like, Lease Purchase, BOT, Revenue Sharing, Reversed Murabahah, Murabahah Line of Credit, Musharakah Overdraft, still need to exert more effort to at the first stage to enhance the existing hybrid contracts and the same time create new contracts.
    The process, being difficult, it should keep close eye on the objectives of Shariah in general, and the objectives of the prohibition of Riba with dynamic open mind avoiding rigidness, inflexibility, and blind taking hold of the texts and false statements.
                  

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01-25-2014, 05:16 PM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    2- 2- Contemporary risk mitigation tools;

    It is generally agreeable that Islamic institutions are bearing the same credit, market, operation, liquidity, and compliance risks that conventional financial institution bear beside additional special risks quite related to the nature of Islamic institutions in terms of:

    1- Products structure risk within which Islamic institutions face additional risks in forms of object risk, promise fulfillment risk, delivery risk, price risk including high cost of fund as well as impermissibility to charge more in case of delinquency which can be addressed also as opportunity cost risk …etc., and also operational risks in a forms of products process risk, additional legal risks, Shariah compliance risk … etc, and also new market and liquidity risks.
    2- Structure of asset and liabilities risks.
    3- Capital requirement risk within which the minimum capital Islamic institutions have to keep is bigger than conventional banks.
    4- Shariah screening risk which is indeed very special.

    The above points are supported by many scholars and Islamic banking practitioners; "In a recent book on Risk Management in Islamic Banks, 11 Khan and Ahmad argued that Islamic banks not only face the type of risks that conventional banks face but they are also confronted with “new and unique risks as a result of their unique asset and liability structures.” According to Khan and Ahmad, this new type of risks is an immediate outcome of their compliance with the Shari’ah requirement. They added that even in regard to common or conventional risks, the nature of risks that Islamic banks face is different from those counterpart risks faced by conventional banks" . So Islamic banks, while facing such a higher risks, need different comprehensive risk framework, as well as more investment in research, information technology, and innovation in this field aiming to enhance the current risk management techniques and emerge new risk management tools and application.
    Although, the risk managements techniques used in conventional banking are agreed upon to be Shariah impermissible, but the experience of Islamic banking in creating the current risk management tools reveal the capability to extract, from the conventional banks practices and Fiqh a customized and structured Shariah permissible new techniques.
    The following are some of the major risk management tools used in Islamic banking industry:

    1- Revenue sharing and Revenue Sharing Sukuk
    2- Service and usufruct-based finance
    3- Third party guarantee: deposit guarantee
    4- Reverse Murabahah and Murabahah line of credit
    5- Bundles/packages financing: applying the majority rule
    6- Hedging through options (not trading options)

    The following also are some risk management tools facing different disputes and arguments among some scholars and Islamic banking practitioners which can be potential and promising to be legalized:

    1- Swapping of usufructs;
    2- Variation of future profit ratios;
    3- Receivables trading against assets;
    4- Combination of securitization, (Hawalah and Tawaruq);
    5- Converting diminishing Musharakah into shares;
    6- Return protection (Waqf Fund);
    7- Waiver of right to profit;
                  

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01-25-2014, 05:18 PM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    Conclusion:

    Finally, the paper defined the meaning of Riba in Language and in Fiqh and the prohibition of it in Quran and Sunnah and concluded to the fact that Riba and Interest are both refer to one concept and one meaning. The paper also defined the nature and the characteristics of debt, and discussed some disputes on the prohibition of Riba between some modernists and some orthodox writers. All that was an introductory to define the main objectives of the prohibition of Riba which are based on the eight unique objectives extracted built by Prof. Dr. Monzer Kahf. And then talk about the main implication of the prohibition of Riba.
    Although, as mentioned in the paper, that Islamic finance, by nature, facing and bearing risks more than conventional banking quite linked to its morality and Shariah permissibility. It is quite obvious, as a result of this paper, that Islamic finance as a real asset based finance has a unique and logical characteristics and nature that, to large extent, helps in improving Islamic banking industry which is become a worldwide phenomenon.
    Despite that still Islamic industry needs more efforts in the area of researches, innovations, and flexibility to enhance current hybrid instruments in the areas of new sale and banking products and risk management.
                  

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01-25-2014, 05:19 PM
الهادي هباني
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Re: The Objectives of the Prohibition of Riba By: Elhadi Habbani (Re: الهادي هباني)

    References:

    1- Dr. Monzer Kahf - Maqasid al Shari’ah in the Prohibition of Riba and their Implications for Modern Islamic Finance - IIUM International Conference on Maqasid al Shari’ah - August 8-10 – 2006;
    2- Mohammad Nejatullah Siddiqi - RIBA, BANK INTEREST AND THE RATIONALE OF ITS PROHIBITION - ISLAMIC RESEARCH AND TRAINING INSTITUTE ISLAMIC DEVELOPMENT BANK;
    3- MOHD NAZRI CHIK - SHARIAH IN ISLAMIC FINANCE - Shariah Compliance Risk Management - Risk Management Division - Bank Islam Malaysia Berhad;
    4- Abu Umar Faruq Ahmad, University of Western Sydney - M. Kabir Hassan1, University of New Orleans - RIBA AND ISLAMIC BANKING - Journal of Islamic Economics, Banking and Finance;
    5- Engku Rabiah Adawiah Engku Ali – Riba and its Prohibition in Islam – International Islamic University – Malaysia;
    6- Dr. Monzer Kahf – Zakah and Prohibition of Riba in the Islamic Economic System;
    7- Dr. Tariqullah Khan - Islamic Banking and Finance in Theory and Practice - Lectures 3and 4 Theme-2 - QFIS QF Fall 2012.
    8- Qamos Al-Maani - www.almaany.com
    9- Ejabat google – www.ejabat.google.com
    10- Albarally Meherally – Understanding Riba (Usury) - www.mostmericful.com
    11- Mark Robbani of institute of Islamic Finance , on the IBF-Net Yahoo Group – Concept Islamic Economics and Finance (CIEF) blog – www.cief.wordpress.com – March 2006.
    12- Permanent Committee for Scholarly Research and Ifta - Portal of the General Presidency of Scholarly Research and Ifta – Kingdom of Saudi Arabia – Part No: 13, Page No: 329.
    13- M. Umer Chapra - The Journal of Islamic Economics and Finance (Bangladesh) - Vol. 2, No. 1, January-June 2006, pp. 7-25 – page 1
    14- MOHD NAZRI CHIK - SHARIAH IN ISLAMIC FINANCE - Shariah Compliance Risk Management - Risk Management Division - Bank Islam Malaysia Berhad; pages 17
    15- Dr. Tariqullah Khan - Islamic Banking and Finance in Theory and Practice - Lectures 1and 2 - QFIS QF Fall 2012 pages 35, 36
    16- Mohammad Nejatullah Siddiqi - RIBA, BANK INTEREST AND THE RATIONALE OF ITS PROHIBITION – ISLAMIC RESEARCH AND TRAINING INSTITUTE ISLAMIC DEVELOPMENT BANK – pages 38-41.
    17- Prof. Dr. MONZER KAHF - HYBRIDS CONTRACTS - Session 8 - Faculty of Islamic Studies, Doha, Fall Semester 2013 – page 3
    18- Qamos Al-Maani - www.almaany.com
    19- Ejabat google – www.ejabat.google.com
    20- الدكتو محمد محمود الجمَّال – القيمة الإقتصادية للزمن في المعاملات المالية المعاصرة – دراسة مقارنة – وزارة الأوقاف و الشئون الإسلامية بدولة قطر – الطبعة الأولي – 1430ه الموافق 2009م – صفحات 59، 76،77،78
                  

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