Another way of looking at Riba/Interest.
There are many reasons of riba being haram in Islam. Haram means forbidden. It is highly forbidden in Islam. It is said that being involved in riba means declaring war with Allah and His Prophet (PBUH).
Riba means any amount received in excess of original amount lent to a person. That is the simple meaning of riba. In technicality, there are many other aspects of riba but that is the general translation.
Riba is haram because it takes advantage of a person already in trouble. The person who cannot arrange Rs. 1000 today, will have to arrange Rs. 1000 + interest tomorrow. That person will borrow even higher amount from somewhere else to pay this debt and this way he will keep sinking in the quicksand of riba.
However, lets assume there are no poor people and debt is only taken by rich people to take advantage of leverage. They can easily repay their debt and know what they are doing. There is no taking advantage. What know? Is it still harmful to society? Is it still immoral to practice riba?
Interest or riba causes inflation which means increase in prices.
In the above chart, interest on borrowing and inflation of Pakistan is shown for 13 years (2004 – 2016). As you can see does change with interest on borrowing.
So what does this mean and how it is not fair?. Assume that you are not practicing riba but other people around you do. So they are unfairly affecting prices and something you could buy for Rs. 100 yesterday, you cannot buy for the same amount today. I believe it is unfair that the rest of population should pay for the ones who participate in riba.Tags: Islamic finance, Riba