There are two kinds of Riba

  1. Riba-An-Nasiyah/Riba-Al-Quran
  2. Riba-Al-Fadl
  • Riba An Nasiyah/Riba Al-Quran:

In the Holy Quran, Allah (SWT) says in Sura Al-Baqarah (2-279): “ …..And if you repent, yours is your principal”

It is reported by Harith ibn Abi Usamah in his Musnad that Sayyidna Ali Radi-Allahu Anhu reportedly referred that the Holy Prophet said:

“Every loan that derives a benefit (to the lender) is riba”.

Example of Riba-al-Nasiyah/Interest: If Mr. A gives Mr. B (a borrower) R100 on the understanding that Mr. B will pay him back R110 in one month, then Mr. The additional R10 in this instance is known as interest, or riba.

  • Riba-al-Fadl:

“Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates and salt for salt, like for like, payment made hand by hand. If anyone gives more or asks for more, he has dealt in riba. The receiver and giver are equally guilty”

Based on the aforementioned description, it should be emphasized that exchanging one kilogram of wheat for one and a half kilograms of wheat in a spot trade would be economically illogical. Because of this, some fuqaha have noted that Riba-al-Fadl has been forbidden because, if left unprohibited, it might be used as a ruse to obtain Riba-al-Nasiyah. Two (gold and silver) of the six items mentioned in the hadith definitely depict the commodity money in circulation at the time. The fact that gold and silver are monetary commodities is one of their fundamental qualities.

In actuality, at some point or another, each of the six commodities named in the hadith has been employed as a medium of exchange.

Only the first version (Riba An Nasiyah) was regarded as Riba during the dark ages. However, Riba-al-Fadl, the second kind, was likewise categorized as Riba by the Holy Prophet (peace be upon him).

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