ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Is ‘Islamic Finance’ Islamic?

Is ‘Islamic Finance’ Islamic?

Riba could mean usury, interest, economic rent and even surplus value (in the Marxian sense). Riba is “un-Islamic.” Without riba, capital accumulation, and capitalism itself will not be possible. However, those who own capital in the Muslim world have taken charge of defining what is Islamic and what is not. The result? They find ways to multiply it in modes that benefit only themselves, just as their non-Islamic counterparts.

To elaborate on the question, let me quote five ayats from the Quran that ban riba (Arabic: ربا) first and explain riba later. These ayats are from the surah Al-Baqarah:

Ayat 275: Those who consume riba cannot stand except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is just like riba.” But Allah has permitted trade and has forbidden riba. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns—those are the companions of the Fire; they will abide eternally therein.

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Updated On : 12th Apr, 2021

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