Usury and Interest: A Comparative Economic Study (book): Difference between revisions

← Older edit Newer edit →

VisualWikitext

@@ Line 19: / Line 19: @@
 ===The prohibition or permissibility of usury in relation to various issues in Islamic Jurisprudence===
 Rafiq Yunus connects a precise understanding of the concept of usury to four categories in Islamic jurisprudence: loans, profit-sharing (qirad), deferred sales (bay' al-ajil), and early payment discounts (da' wa ta'jil: reduce and receive promptly). He argues that a loan involves the transfer of property without any expectation of additional compensation or agreement, with only the principal amount being returned to the lender. However, since a loan is considered a form of charity, the lender is rewarded with divine merit (p. 19). The author suggests that the most effective way to generate profit from capital is through the contract of profit-sharing, as it entails a partnership and shared risk in both profits and losses (p. 20).
-According to Rafiq Yunus, Islamic Jurists commonly know it permissible to receive additional payment in deferred sales under certain conditions or as part of the contract. He argues that the timing or immediate delivery of goods constitutes a component of the transaction price. However, he notes that some scholars consider such additional charges in deferred purchases to be usury and thus impermissible (p.20). According to him, those jurists who accept the receipt of extra payment in exchange for deferral and delay have also issued rulings permitting discounts in return for prompt payment of debts. In this context, if a buyer pays the transaction amount earlier than agreed and for a lesser sum, the seller may forgive the remaining balance (p. 21). It is important to mention that the author refers specifically to the prompt payment of debts arising from sales, rather than the early repayment of general debts or long-term loans with a discount for early settlement. It appears that the majority of Sunni jurists prefer to prohibit transactions and sales conducted through the methods of delay and promptness due to the conflicting hadiths.
+According to Rafiq Yunus, Islamic Jurists commonly know it permissible to receive additional payment in deferred sales under certain conditions or as part of the contract. He argues that the timing or immediate delivery of goods constitutes a component of the transaction price. However, he notes that some scholars consider such additional charges in deferred purchases to be usury and thus impermissible (p.20). According to him, those jurists who accept the receipt of extra payment in exchange for deferral and delay have also issued rulings permitting discounts in return for prompt payment of debts. In this context, if a buyer pays the transaction amount earlier than agreed and for a lesser sum, the seller may forgive the remaining balance (p. 21).
+It is important to mention that the author refers specifically to the prompt payment of debts arising from sales, rather than the early repayment of general debts or long-term loans with a discount for early settlement.
+It appears that the majority of Sunni jurists prefer to prohibit transactions and sales conducted through the methods of delay and promptness due to the conflicting hadiths.
 From the analysis of four relevant jurisprudential topics regarding excess in contracts, Rafiq Yunus concludes that excess in deferred sales, although it is categorized as a type of usury, is deemed permissible. This is supported by the the term "permissible usury" in the writings of Islamic jurists and commentators (p. 21). He argues that in the context of the verse on usury ([[Verse 275 of Surah al-Baqarah|verse 275 of Surah al-Baqarah]]), which contrasts «احل الله البیع» (Allah has made trade lawful) with «حرم الربا» (and He has made usury unlawful), just as some sales are permissible and others are prohibited, there are also instances of usury that are not forbidden (p. 22).
 ===The importance of time in transactions===
 Concerning the significance of time in transactions (temporal preference), the writer contends that Islamic teachings do not assign value to time in the context of loans; nevertheless, it is recognized as having financial value in situations such as installment sales or leasing (pp. 23-25). The author proceeds to analyze and critique two legal arguments from [[Al-Mawdudi]] in his book on usury and from [[Muhammad Baqir Sadr]] in "Our Economy," as well as two economic discussions by Hazem El-Beblawi and Said Najjar concerning the valuation of time in transactions (pp. 26-33). Yunus Rafiq reject both Al-Mawdudi's and Sadr's perspectives, attributing the problem to a lack of precise and correct understanding of riba al-nasiah (increase in return for time), riba al-nisa' (increase without considering time), and riba al-fadl (time without increase) (p. 29).