Abstract
The element of interest or ‘Riba’ is an inseparable part of the economic activities in today’s world. And perhaps it is one of the causes of the business cycles and fluctuations and a hurdle in the way of economic development especially in the third world countries. It is the rate of interest due to which money is treated as a commodity leading to the concentration of wealth in a few hands; and as a consequence, the whole economy then suffers. Allah Almighty has clearly prohibited the element of interest or riba in the Holy Qur’an. The Shariah of Islam makes no distinction between interest and usury. Islam treats money as a medium of exchange and not a commodity. Therefore, taking interest is forbidden on loans for consumption as well as loans for productive purposes. Islam wants to eliminate all forms of exploitation from the economy. It wants to establish justice between the financier and the borrower; the capitalist and entrepreneur in order to establish and maintain an egalitarian society in the world.
Dr. Muhammad Farooq, . (2012) Interest, Usury and its Impact on the Economy , The Dialogue, Volume 7, Issue 3.
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